Oral Answers to Questions

ENVIRONMENT, FOOD AND RURAL AFFAIRS

The Secretary of State was asked—

Recycling (Charities)

Philip Davies: What support her Department provides to small local charities promoting recycling by selling on second-hand products and material.

Ben Bradshaw: A wide range of funding is available for those sorts of schemes from a variety of Departments and other sources. We will publish shortly a consultation document on our waste strategy review, which will address the future role of the voluntary and community sectors in waste management.

Philip Davies: I thank the Minister for that reply. Will he consider providing some much-needed funding for Bradford area play association and Windhill community furniture store in my constituency and other small groups, which not only provide an invaluable service in the local area but play an important recycling role by selling second-hand products that would otherwise be thrown away?

Ben Bradshaw: I note that the hon. Gentleman is asking me to make another spending commitment, which I am nervous about doing. He is right, however, to point out the important role that the voluntary sector plays in recycling and waste management. I am aware of one of the groups in his constituency that he mentioned, because he wrote to me about it. May I recommend that he advises it, if it has not already done so, to contact either its local Business Link or the national furniture reuse network, which might be able to help with advice on funding streams? As I said to him, the Government are examining closely whether the voluntary and community sector can play a bigger role in waste management as part of our waste review.

Peter Bone: Yesterday, I received a visit from Ricoh, a company in my constituency, which proposes to provide can crushers in schools for recycling. The profit would be sent back to schools to fund projects. Can the Minister give that company any encouragement?

Ben Bradshaw: That sounds like an excellent idea. If the hon. Gentleman writes to me about it, I might be able to provide some advice on how the company could get such an idea off the ground. Recycling of aluminium is a worthy project and it fetches a good price. One of the problems is that it is a relatively light substance and many local authorities do not go to much effort to collect it because it does not count towards their recycling targets. That is another issue that we hope to address in the waste review.

Biodiversity

Greg Clark: If she will make a statement on her policy on biodiversity.

Elliot Morley: Our goal is to conserve and enhance biological diversity within the UK and abroad. The Department for Environment, Food and Rural Affairs plays an important role in promoting biodiversity internationally, through support and funding for work on conserving individual species and successful participation in key international conventions and forums. At home, we are making good progress towards our target to bring into favourable or recovering condition 95 per cent. of all nationally important wildlife sites by 2010.

Greg Clark: Is the Minister aware of the work of the London ecology unit in establishing the critical importance of back gardens in promoting biodiversity in our urban settings? Back gardens are being lost at an alarming rate through their classification as brownfield sites. How can we have a credible biodiversity policy in urban areas when Ministers admit to me that they do not even know how much green space in our towns and cities is being lost every year in that way?

Elliot Morley: With respect, the hon. Gentleman is confusing two issues. It is certainly true that back gardens make an important contribution to biodiversity. I say that as someone who featured in the BBC Wildlife magazine, probably due to a lack of gardening skills. On the brownfield definition, I think that he is thinking of waste areas in urban areas, which can have some biodiversity benefit because they are overgrown, and which are classed as brownfield sites in relation to development. In terms of land assessment and registration, most local authorities have a fairly good idea of the figures.

Colin Challen: I know that my hon. Friend will be very much aware of the concerns expressed by non-governmental organisations about the rapid development of palm oil and its impact on biodiversity and tropical deforestation. Is he having discussions with his colleagues in the Department of Trade and Industry and the Department for International Development to address this serious situation and to ensure that we do not use palm oil from such sources?

Elliot Morley: Yes, I can confirm that for my hon. Friend, and I know that other hon. Members have an interest in this matter. We strongly support the Department for Transport's proposal for a biofuels obligation, but we do not want that to be at the expense of deforestation and unsustainable management in terms of importation. DEFRA has been working with the Department for Transport to introduce a certification scheme for imports of biofuels to ensure that we address those issues.

Robert Smith: As the Minister will know, the Centre for Ecology and Hydrology provides excellent research at its Banchory station, monitoring the upland areas and sea bird life. Can he clarify how Government policy will be enhanced by the loss of four of the Centre for Ecology and Hydrology's research centres and a cut in staff of more than a third? Will he ensure that his Department makes representations to the Natural Environment Research Council to make it understand fully the importance of effective biodiversity research in informing Government policy?

Elliot Morley: I can certainly confirm that the Centre for Ecology and Hydrology provides an excellent service. DEFRA spends about £2.7 million on commissioning work from it. As the hon. Gentleman will know, the CEH is accountable to the Natural Environment Research Council, which has proposed its restructuring. The proposal is still at the consultation stage. I am sure that the council will listen to the representations made to it, and of course DEFRA will contribute to the consultation.

Tony Lloyd: Whether we are talking about palm oil or the English apple in the context of monoculture, is not the role of the distribution system, and our supermarkets in particular, very damaging to biodiversity? Will the Minister take a serious look at the role of the supermarkets, talk to them and see whether he can persuade them to wean themselves off monoculture?

Elliot Morley: I can confirm that. DEFRA has commissioned work on food miles. On Monday I toured the north-west and looked at sustainability projects. I was very impressed by the work of the NHS and Arrowe Park Hospital NHS Trust, which had redesigned contracts to ensure that food came from local suppliers, thus reducing the number of suppliers and giving local businesses an opportunity to tender.

Peter Ainsworth: The Minister has already been a great deal more helpful today than the Prime Minister was yesterday on the subject of the proposed closures, but may I press him a little further?
	"Given the level of funding reduction, the extent of the closures that have been proposed seem disproportionate. The proposed reduction in staff numbers . . . must be expected to have a significant impact on scientific capability, and this will denude the UK science base of invaluable expertise".
	Those are the words of the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for South Dorset (Jim Knight). Given the concern that hasbeen expressed, not only by non-governmental organisations but by his ministerial colleague, will the Minister not just contribute to the consultation on the closures but actively oppose them?

Elliot Morley: One of the centres is in the constituency of my hon. Friend the Under-Secretary, who has been making representations like the assiduous constituency Member that he is.
	I repeat that the NERC needs to take account of the fact that the centres can provide scientific services of the quality that we have come to expect. It is involved in consultation. Members of Parliament and, indeed, other organisations are free to comment on the proposals and, as I have said, DEFRA will also be commenting.

Biofuels

Graham Allen: What proportion of crops grown in the UK over the next five years she estimates will be for the manufacture of biofuels; and if she will make a statement.

Elliot Morley: In November 2005, the Government announced their intention to introduce a renewable transport fuels obligation. It will require 5 per cent. of transport fuel to be from renewable sources by 2010. At this stage, it is not possible to say what proportion of the obligation will be met from UK sources.

Graham Allen: As we heard during the exchange about palm oil, none of the materials that we think are sustainable is without its own environmental consequences. We all want biofuels, but will the Minister make it clear that we will not denude our rainforests to create them, thus creating even more problems? When he examines the certification scheme on an international basis, will he ensure that it includes all the necessary safeguards, including safeguards for the producer—often an ordinary peasant farmer—who, on occasion, is the unwitting victim of our environmental policy?

Elliot Morley: I know that my hon. Friend takes a close interest in the issue and I agree with him entirely. There is a social dimension.
	Ethanol imports do not necessarily originate in palm oil crops; they may come from wheat crops. Whatever the source of potential imports, however, Government policy must not add to unsustainable pressure in other countries. For that reason we are determined to establish the certification scheme. It is now well advanced, and I will bear in mind my hon. Friend's sensible remarks.

Philip Hollobone: Given the importance of encouraging farmers in this country to grow biofuels as part of the battle against climate change, will the Minister consider relaxing EU laws on, for instance, set-aside so that biofuels can be grown on land that would otherwise be unproductive?

Elliot Morley: I am very pleased to tell the hon. Gentleman that that facility already exists—farmers can grow crops on set-aside land if it is for industrial use.

Rob Marris: May I caution my hon. Friend on the matter of safeguards? Some people are driving around this country using, for example, used chip fat, as a biofuel. Such materials do not get the 20 per cent. fuel discount, but they are incredibly polluting. We do not really know what is going into these vehicles—it could be just any old rubbish out of a chip pan. What steps are the Government taking, or proposing to take, to safeguard us from the worse air pollution that will result from the use of unauthorised, uncertified biofuels?

Elliot Morley: We very much welcome the use of used cooking oils—which are sustainable and recyclable—as fuel, but my hon. Friend is right to point to the importance of taking into account quality control and the carbon dioxide balance in the processing of biofuels. We have addressed this issue by making capital allowances available for the processing of biofuels, but they are payable only if the processes meet the established standards.

Stephen Crabb: My question is the complete opposite of that asked by the hon. Member for Wolverhampton, South-West (Rob Marris), in that I urge the Minister to speak to the Financial Secretary to the Treasury about revising his interpretation of this rule. Numerous excellent biofuel microbusinesses, such as the Veg Oil Motoring company in my constituency, have researched the environmental benefits of their product. However, they are being put in jeopardy by the Financial Secretary's decision not to include them in the lower duty band.

Elliot Morley: As we heard from my hon. Friend the Member for Wolverhampton, South-West (Rob Marris), quality control is an issue. The whole House will agree that we want to support this industry, which is sustainable and deserves encouragement, but that we also want good standards. In applying capital allowances, which is a form of financial encouragement, it is not unreasonable to ask that the company concerned maintains minimum decent standards.

Brian Jenkins: I do not want to pour water on my hon. Friend's troubled oils, but he must surely recognise that the technology that we are talking about supporting is not in fact sustainable. Will he ensure that we do not spend excessive sums on supporting it, and that we look instead for new technologies to drive our vehicles of the future?

Elliot Morley: We need a range of technologies and an energy mix, and such a mix is a feature of the current energy review, which is being led by my hon. Friend the Minister for Energy. However, the fact remains that used cooking oils exist, and processing them into fuel is a very good way of dealing with them. It is desirable to replace a proportion of the fossil fuels in our fuel mix with biofuels; indeed, we should encourage that.

Food Procurement (Animal Welfare)

Adam Afriyie: What proportion of publicly procured food met British standards of production and animal welfare in 2004–05.

Ben Bradshaw: All food produced in Britain should of course meet British standards for production and animal welfare. Records on procurement are not held centrally, but public bodies have to balance their support for local producers with a duty to provide value for money for taxpayers.

Adam Afriyie: I thank the Minister for that degree of reassurance. It is clear that we have some of the best, and highest standards of, animal welfare legislation in the world. However, if our public procurement involves the purchase of goods from overseas, where standards may be lower, we may be fuelling the continuation of a lesser standard of care for animals than exists in the UK. Is the Minister aware of any instances of the public procurement of food produced outside the UK containing animal products that are below UK standards?

Ben Bradshaw: Yes. It is inevitable that products imported from parts of the world that do not meet the same welfare standards as this country has are produced to a lower welfare standard; indeed, in some cases that is true of other parts of the EU. Britain already has higher welfare standards in respect of pigs, for example. That is why I would always urge consumers to buy British meat, which is undoubtedly produced to higher welfare and other standards. However, as the hon. Gentleman knows, we are a major trading nation and we have doubled our meat exports, in both volume and value terms, since 2001. I urge him to be cautious in recommending protectionist measures, which could hit our own exporters.

Russell Brown: Will my hon. Friend comment on a report on "Farming Today" that contaminated pig feed had been used in the Netherlands, Belgium and Germany?

Ben Bradshaw: I read a transcript of that report only about an hour and a half ago. I have asked the Food Standards Agency, which is responsible for food safety in this country, and my Department to give an urgent response. I repeat what I said a moment ago to the hon. Member for Windsor (Adam Afriyie): as always, I recommend that British consumers buy British pork, which is raised to higher welfare and other standards. The same is true of British bacon. We consume far too much imported bacon in this country, and British consumers should support British farmers.

Julie Kirkbride: Significantly, the Minister has not mentioned the British egg industry, which is under severe threat from competition from abroad, where lower standards apply. What is he doing, in terms of public procurement or any other strategy, to protect the British egg industry?

Ben Bradshaw: I and my ministerial colleague in the House of Lords are responsible for this area of policy. We have regular meetings with the British Egg Industry Council and the British Poultry Council, and we have met those bodies more often recently to discuss the threat from avian flu. However, I hope that I can reassure the hon. Lady by saying that consumption in this country of British-produced eggs and poultry is growing—a trend that is not evident in other countries. Again, we have to strike a balance between abiding by international and EU trade laws, from which we benefit as exporters, and encouraging people to support the British egg and poultry industries. As a whole, our domestic production is of a higher standard than that in the rest of the world.

Lindsay Hoyle: I presume that my hon. Friend will be aware of the dangers of importing beef from Brazil, where slave labour is used to clear forests and produce very cheap beef at the expense of British farming. Will he ensure that our procurement policies take account of the people who are forced into slave labour and the conditions that they endure, as well as animal welfare standards?

Ben Bradshaw: I am sure that my hon. Friend will know that our procurement policies are legally constrained by the World Trade Organisation rules, from which, as I just explained, we benefit as exporters. They are also constrained by EU rules, but I guess that my hon. Friend may be pleased to hear that the recent outbreaks of foot and mouth disease in Brazil have caused British imports of Brazilian beef to fall in the past few months. The lifting of our over-30-months scheme means that beef produced in this country that is over 30 years old—[Interruption.] I mean beef that is over 30 months old is now allowed to go on to the market, so the future for home-produced beef for domestic consumption and export is very rosy.

William McCrea: Does the Minister accept that there is a sense of frustration among UK farmers? They incur high costs in producing food to the highest possible standard of quality and animal welfare, but have to compete with produce from other countries that is often of a lower standard.

Ben Bradshaw: I have already implied that I accept that frustration, but there is another side to the equation. We can make something of the fact that our meat and other food is produced to a higher standard, and use that to persuade British and UK consumers to buy it. As I just said, our meat exports have more than doubled, in both value and volume, since 2001. That speaks volumes for the quality of what we produce.

Rural Payments Agency

Geoffrey Clifton-Brown: If she will make a statement on the effectiveness of the Rural Payments Agency.

Margaret Beckett: In 2004–05, the RPA met all its key performance targets against a background of considerable organisational change and the introduction of the single payment scheme. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for South Dorset (Jim Knight), announced on 31 January that the RPA would meet its 2005–06 commitment for starting SPS payments.

Geoffrey Clifton-Brown: I draw the House's attention to my entry in the Register of Members' Interests in respect of this matter. I thank the Secretary of State for her reply, but the Department is wallowing in a quagmire with the RPA, given the number and complexity of the schemes involved. This week, Lord Bach said that "the bulk" of single farm payments will be made in March, as opposed to earlier forecasts that 96 per cent. of such payments would be made then. That is a considerable climbdown, given that the Germans are able to pay their farmers on time. Farmers in Scotland, Northern Ireland and Wales have received 75 per cent. of their payments, so when will the Department stop introducing overly complex schemes? The Roman empire was killed by bureaucracy—how long does she think it will take her Department to kill off British agriculture?

Elliot Morley: I thought that Attila the Hun killed off the Roman empire.

Margaret Beckett: As my hon. Friend has just said, he rather thought that it was Attila the Hun who killed off the Roman empire, but we will not go into that. The hon. Gentleman is in error. He is right that it looks as though we shall not be able to make as much as 96 per cent. of the payments in March, which was the original goal, but we hope to make the majority of payments then. He described what was happening elsewhere. Scotland, Northern Ireland and Wales are paying on a different basis—that of previous entitlement. My understanding is that in Germany, where the circumstances are more similar to those here, the Government will issue entitlement notices to their farmers by mid-February, which is about the same time scale as ours.

David Taylor: As a DEFRA Select Committee rapporteur on this issue, I note that the software for the single farm payments is being supplied by Accenture, the Bermuda-based former Andersen Consulting. Does my right hon. Friend the Secretary of State agree that while we should pay sincere tribute to the Rural Payments Agency staff for their heroic efforts, the Government and, more important, long-suffering taxpayers are over a barrel on this project as the quoted revenue costs have already doubled to almost £40 million? When are we going to get an effective ICT strategy in DEFRA?

Margaret Beckett: I appreciate my hon. Friend's tribute to the RPA staff who have worked, and are continuing to work, enormously hard and long hours. He was perhaps a little unjust, however. He is right that both the cost and the time taken to put in the schemes are substantially more than originally envisaged. I remind the House that the original costs and time scale were established before the 2003 reform negotiations, so they were on the basis of the old CAP scheme. It was inevitable that there would be a change in both the costs and time scale once the new reforms had to be accommodated.

Michael Jack: Pursuant to the right hon. Lady's last answer, will she explain—bearing in mind that her Department was the author of the version of the single farm policy that is being introduced into the United Kingdom—why the additional volumes of work that have occasioned the extra costs to occur, as mentioned by the hon. Member for North-West Leicestershire (David Taylor), and the problems that the RPA has experienced have been a direct result of what appears to be an unanticipated volume of work from a policy that she and her hon. Friends agreed?

Margaret Beckett: It is indeed a policy that the Government decided to implement—and I think that at the time the House shared the Government's view that this was the best scheme to implement as it was the only one to operate on any basis other than simply paying people what they would have got on the basis of the farming that they were doing up to three or so years ago. We did not believe that that basis of payment would be sustainable or acceptable to English taxpayers for many years to come. For that reason, we thought that in the long term this scheme was better for the farming community.
	The right hon. Gentleman is right to draw attention to the fact that there were a substantial number of changes. As a result of the new entitlements under the reformed scheme, about 50 per cent. more people are now making claims from the RPA than in the past, and there was a 1,000 per cent. increase in requests either for new land to be registered—land that people had not previously bothered to register—or for the boundaries of registered land to be amended. In the past four months alone, about 52,000 map changes had to be made. Some of those changes came from people who had made previous applications and had said that their land had been registered. There is a genuine problem and it is important to keep on top of it. We are doing so.

Daniel Rogerson: As hon. Members have said, there has been a series of problems with farmers who have contacted the RPA over mapping and inaccuracies in letters that they have received. A lot of the contact that farmers have had has been unnecessary and would have been dealt with if the agency had been more efficient and dealt with each issue as it arose. Call centre staff, for example, were not briefed on the issues that farmers were raising with them. Does the Secretary of State intend to apologise to farmers in England for the inefficient way in which they have been treated?

Margaret Beckett: Over the past year, we made it clear that we were concerned about some of the problems that became evident at the start of last year. It may not be within the hon. Gentleman's memory, but it will be within the memory of many other hon. Members, that it is now more than a year since we were forced to announce that we would not be able to begin payments until February. Those problems did arise some time ago and huge amounts of extra effort—including extra staff—have been put in. I remind the House that the IT programme is being monitored by the Office of Government Commerce in its gateway project, and it has said recently that it has been managed very professionally, with very visible ministerial and departmental support.

James Paice: Now that Lord Bach has cleared up the confusion that he created last week, when he referred to making partial payments, by saying that full payments will be made—as the Secretary of State has just confirmed—can she now tell us what is meant by the phrase "the bulk", which appeared in his press release? Her own just now referred to starting on time. How many farmers will not get their payments by the end of March? Can she confirm that probably tens of thousands will still be waiting well into April for their money, largely because of her determination to introduce that very complicated scheme at the earliest opportunity and to allow 50 per cent. more people to claim the subsidy than ever claimed it in the past?

Margaret Beckett: I would have thought that hon. Members welcomed that increase. I am not aware that there was any confusion. The hon. Gentleman will recall that we have been continually pressed to give assurances that if the RPA were not in a position to make full payments, partial payments would be made. It has always been the publicly stated position that some payments would begin to be made. We hoped that full payments would be made, but if that was not possible, partial payments would have to be made. However, nobody really wanted that, including the farming community, because of the complexities that it would cause.
	The hon. Gentleman says that it is a complicated scheme, but that is misconceived. The transition from 11 different schemes with different rules, payment dates and procedures, to a single scheme is complicated, but the scheme itself—once it is fully in place—will be simpler and we envisage that it will reduce the bureaucracy that farmers face by some 15 per cent., as well as giving an estimated £400 million to £500 million a year in extra income to the farming community in the longer term.

Avian Influenza

Nigel Waterson: If she will make a statement on recent development of her Department's contingency plans in the event of a national outbreak of avian influenza.

Ben Bradshaw: We laid the latest version of our contingency plan before Parliament in December. Our response to avian flu is kept under constant review.

Nigel Waterson: I appreciate that a register has now been introduced for poultry farmers with more than 50 birds, but what is being done to keep smaller poultry farmers in the loop as the situation develops? Does the Minister have a contingency plan to loosen the rules on free range animals if it becomes necessary to order farmers to bring their poultry indoors?

Ben Bradshaw: On the hon. Gentleman's latter point, we are cognisant of the concerns, not only in the free range industry but across the industry, and if we wound up measures to prevent spread, in the event of an outbreak in this country, we would have a proper risk assessment and wind them down as soon as it was safe to do so afterwards, to avoid an unnecessary impact on those producers.
	On the hon. Gentleman's first point, we put the threshold at 50 because all of our veterinary advice suggests that it is the larger flocks that are more likely to be infected and then create the size of viral load that is more likely to spread. There are more poultry keepers in this country than at any time since the second world war. Although we have not made it compulsory for people who keep fewer than 50 birds to register, we are advising them to do so to make the transmission of information easier.

Bob Spink: We must stop the virus mutating so that it can be transmitted from human to human, but it is likely to do so in those who are exposed to the virus—the workers in the industry. What discussions is the Minister holding with colleagues in other Departments to ensure that all workers in the poultry industry are vaccinated as soon as possible?

Ben Bradshaw: We are working closely with the Department of Health on that. Recently, I met representatives of the poultry workers' trade unions. The hon. Gentleman is right to say that the main danger—indeed, the only danger—to human health is for those who live or work in close proximity to infected birds. We have far better biosecurity in this country than in parts of the world where the disease is endemic. For the most impact on trying to prevent mutation, or reassortment, we need to get a handle on the outbreaks in south-east Asia and other countries. In Turkey, as he will know, there are some small back-yard flocks where people actually sleep with their birds and have very intimate contact with them. As far as I am aware, that does not happen in this country.

Bill Wiggin: The report of the independent review on avian quarantine recommends that reverse transcription polymerase chain reaction be used as a method to detect avian influenza. Will the Minister confirm that it is his intention to use that system to detect avian flu? Bearing in mind what he has just said to my hon. Friend the Member for Castle Point (Bob Spink) about small poultry-keepers—people such as me—surely it is worth having more than a voluntary register, which after all is still not open and will not be until 28 February, as people are more likely to bring their poultry into their own homes, thereby risking infection if information about the risk is not given to them.

Ben Bradshaw: I am sure that the hon. Gentleman does not have the level of intimacy with his birds that I described as being commonly the case in other parts of the world.
	It is interesting that the hon. Gentleman recommends that we take a less proportionate and more bureaucratic approach to the poultry register. I thought that his party favoured better regulation, but clearly not. We think that we have taken a sensible and proportionate approach, which is supported by all the farming unions and industry representatives, including those with small flocks and hobbyists. In answer to his question about the tests used for avian flu, we shall certainly investigate the usefulness of the test that he described but the best test is still a post mortem based on a sample from an infected bird.

Carbon Dioxide Emissions

Stewart Jackson: If she will make a statement on the measures the Government are taking to reduce carbon dioxide emissions.

Margaret Beckett: In 2000, we published a climate change programme, which set out the approach to tackling climate change. It was updated in December 2004 through the consultation document produced for the programme review and 2005 saw some new initiatives, including the renewable transport fuels obligation and the climate change communications initiative. The pre-Budget report also gave more funding for energy efficiency, carbon abatement technology, carbon capture and storage and biofuels. Additional measures will be announced in the new climate change programme.

Stewart Jackson: The fact is that carbon emissions have not been reduced, but have increased by 9 per cent. over the past six years. Even the Government's chief scientific adviser stated that it is unlikely that they will meet the 2010 target. Clearly, party politics is not working, so is not it time for the Government to join the cross-party consensus, with the Conservatives, Liberal Democrats and other Opposition Members? They should put party politics aside on such a vital issue of international and national importance.

Margaret Beckett: I have always thought that it was a peculiarly British trait to think that if something is really important it should be outside and above the political process. I am not quite sure what people think politics is about. Leaving that aside, I am delighted to welcome the cross-party consensus—all parties are signed up to the targets that the Government set, and were challenged for doing so, some time ago. That is a wholly welcome development. However, I am never one to sign a blank cheque, so until I see the policies that are backing up the consensus that targets are highly desirable, I shall be keeping a watching brief.

Norman Baker: The right hon. Lady had a letter.

Margaret Beckett: Yes, and I have read it carefully. It says, "Let's set up an agency", which is not quite what I am looking for.

Barry Sheerman: Although I congratulate my right hon. Friend on some of the tough decisions that she and the Government have made on reducing carbon dioxide emissions, may I urge her to look at some of the work that Urban Mines—an environmental charity that I chair—has been doing in trying to bring home to people the impact of their carbon footprint on our planet? It is important to explain what the individual, the family and the corporation can do to lessen their carbon footprints. At every level, the carbon footprint is vital to our future. That means taking tough decisions, not those that the President of the United States alluded to a couple of days ago, because the fix will come not from technology but from curbing and changing human behaviour.

Margaret Beckett: My hon. Friend is right and I hope that he will know that, quite recently, the Government launched a new communications programme, with the strapline, "Tomorrow's Climate, Today's Challenge". The purpose of that campaign is to show that all our research evidence suggests that, to change people's behaviour, we must first increase their awareness of the problems and the contribution that they can make. We are very much geared to doing that and I hope that we will have the genuine, cross-party support of all hon. Members, because this is probably the greatest challenge facing humankind.

Nick Hurd: About a quarter of emissions seep out of our own homes. Does the Secretary of State accept the widespread argument that, if we are to transform attitudes to energy efficiency in our own homes, we need more of the simple tax breaks pioneered by the Conservative council in Braintree? If so, does she understand the widespread frustration that the Chancellor appears to be doggedly deaf to the argument?

Margaret Beckett: I take the hon. Gentleman's basic point completely: we could do a great deal more, not least in this country, where, historically, we have neglected energy efficiency. I cannot immediately call to mind the initiative taken by Braintree council, but I am conscious of the fact that the energy efficiency commitment has driven a lot of this work and that is, of course, something that the Government instigated and resourced. With such measures and the Warm Front programme and so on, we are substantially stepping up what we do. He underestimates the figure—from memory, about 50 per cent. of our emissions come from our building stock—and it is important for all of us to address that, not least because it will cut people's fuel bills and making them warmer.

Edward Miliband: Is my right hon. Friend aware that the climate change levy will contribute a 3.5 million tonne reduction in carbon emissions by 2010? Does she agree that, if we will the ends of reduced carbon emissions, we also need to will the means, such as the climate change levy, and that to do otherwise is complete hypocrisy?

Margaret Beckett: My hon. Friend is absolutely right that the climate change levy is, in fact, already making a bigger contribution than we had anticipated to reducing emissions, and we judge it to be a very successful policy. I take his point: we would like all parties in the House to sign up to that policy, but in fairness to other parties, people do not always have identical solutions. If it is still the case—I understand that it is—that the Conservative party is not willing to accept the viability of the climate change levy, it is incumbent on it to come up with equally successful alternatives.

Norman Baker: In the week that we are told that we might reach the point of no return on climate change, is it not a dereliction of duty by the Government that we are still waiting for the climate change review, which was promised in June, then October, then December, then January and now before the Easter recess? When will the review be published? Are the Government still committed to the 20 per cent. cut in carbon emissions by 2010, or is that being abandoned? Will she confirm whether, having caved in to the dinosaurs at the Department of Trade and Industry over nuclear power, she will at least stand firm on the EU emissions trading scheme, given the £800 million windfall that the power sector has benefited from in phase 1?

Margaret Beckett: So much for the cross-party consensus. However, the hon. Gentleman is right to say that, unfortunately, we have not been able to produce the climate change programme review as early as we had hoped, in no small part because it revealed further analysis that we wanted to do to ensure that the programme is as effective as we can make it. I tell him, perhaps somewhat gently, that there is no need for Labour Members to feel apologetic about saying yes about the 20 per cent. target, because every one of the major parties was challenged to include the target of a 20 per cent. reduction by 2010, not in some special little environmental leaflet but in our mainstream manifestos. One did so: the Labour party.

Mark Lazarowicz: My right hon. Friend was quoted earlier this week as saying that the latest research emphasises that even the target to reduce emissions by 60 per cent. by 2050 might not be enough—again, only the Labour party will sign up to that target. Will she explain how she intends to pursue the matter at European level to try to ensure that we get the right targets and policies throughout Europe and thus provide leadership to the world, as we did at Montreal?

Margaret Beckett: My hon. Friend is right to say that there are now questions. The book that we published this week, which builds on the scientific contribution that was made at the Exeter conference, which was part of our G8 presidency, identifies a growing number of questions about whether the goals that the international community has set itself will be adequate, even though they are taxing and difficult to reach. Everyone is re-examining the evidence and the concerns. I assure him that we are continuing, and will continue, to pursue the issue in the European Union. We hope that we can set medium and long-term targets for the European Union, but there are all kinds of discussions about how we should then make progress towards them.
	May I use this opportunity to say something that I forgot to say in reply to the hon. Member for Lewes (Norman Baker)? Contrary to what he might have read recently in the media, every time that I am asked about nuclear power, I say exactly the same thing. It is clearly very boring because it is written up differently on every occasion.

Peter Ainsworth: I think that we are beginning to get to the bottom of why the Government are reluctant to sign up to the cross-party agreement on climate change: they cannot even agree among themselves. Last week, the Department confirmed that UK CO 2 emissions had risen again. Earlier this week, the Prime Minister put his name to yet another pamphlet that said that the science on climate change was even worse and more threatening than we thought. Today, we learn that the Secretary of State's Department and the DTI cannot agree on the future levels of CO 2 with which they expect industry to deal, although industry needs that uncertainty like a hole in the head. We also learned today that the Treasury has been forced by Friends of the Earth to rethink its policies and position on environmental reporting. May I put it to the Secretary of State that although I do not think that it is her fault, there is a real danger that the Government's approach to this most important issue of all is becoming a complete shambles?

Margaret Beckett: The hon. Gentleman is right that CO 2 emissions rose in the year for which we now have confirmed figures, but perhaps does not notice—he certainly has not mentioned it—that the rise was substantially less than the provisional estimates suggested. However, we still regret the fact that there was a rise.
	I take the hon. Gentleman's point about industry completely. I hear constantly from industry how much it would like the Government to give the clearest possible guidance. That is one of the reasons, apart from the scientific evidence, why the Government set the long-term target of a reduction of at least 60 per cent. by 2050. However, he is in error because although the climate of discussion in the House tends to be to suggest that the Government are failing, all five of the major EU15 countries that reduced their greenhouse gas emissions since 1990 saw an increase in their emissions in the year in which this country's increased. In other words, even those that are most successful at getting their greenhouse gases down have experienced an increase in CO 2 emissions. The problem is widespread,rather than just in the UK.
	I assure the hon. Gentleman that the Department is not falling out, or in dispute, with other Departments. We are engaged in a genuine and serious discussion about what is viable and what can be agreed. As for the progress of those discussions, it has never been my practice to conduct negotiations with colleagues through the pages of the news media, and I certainly do not intend to start that now.

Nuclear Waste

Annette Brooke: If she will make a statement on arrangements for dealing with nuclear waste.

Elliot Morley: The Government are committed to solving the radioactive waste problem. The independent Committee on Radioactive Waste Management—Corwm—is due to report in July this year.

Annette Brooke: A recent report by the Committee on Radioactive Waste Management predicts a fivefold increase in highly radioactive waste storage from the new generation of nuclear power stations. Will the hon. Gentleman discuss the full costs of proceeding with a nuclear power programme with his colleagues in the Department of Trade and Industry?

Elliot Morley: As I mentioned earlier, the DTI has embarked on an energy review. All forms of energy will be considered and there will be an opportunity for an open and transparent debate. The priority for Corwm is to deal with the legacy of nuclear waste in this country, which has not been addressed for decades. It is time that we had a proper strategy for dealing with that and I hope that that will be the outcome of the report published in July.

David Chaytor: Does my hon. Friend know the latest estimate for the cost of dealing with legacy waste? Is it not the case that those costs rise annually and are calculated within a very wide margin of error? If we cannot achieve reliable costs for managing the current decommissioning and waste management problem, how can we be expected to trust the costs for the management of future waste generated by nuclear new build? If we do not have reliable costs for that, how can we assess objectively the economic case for nuclear new build against the alternatives?

Elliot Morley: Costings for decommissioning have been published by the Nuclear Decommissioning Authority. As for the legacy issue of nuclear waste, costings are not yet available, because a preferred solution has not been decided. I am quite sure that, when there is agreement on that solution, there will be substantial costs, which, of course, will be made public. When nuclear power was originally embarked on a long time ago, the very high costs of legacy, decommissioning and nuclear waste were not taken into account.

Tony Baldry: When are we going to start to be honest with ourselves about this issue? Fifteen years ago, I had junior ministerial responsibility for nuclear power. We have not moved on at all, and we have not advanced one inch towards a solution for BNFL or Nirex. The position is still exactly the same as it was 20 years ago. The Minister, in talking about meetings in July, is in a fairy tale. We have not found a solution for the storage of low-level nuclear waste. Until we do so it is irresponsible to talk about a new generation of nuclear power stations. Moreover, the costs—

Mr. Speaker: Order. Perhaps the hon. Gentleman can drop a note to the Minister.

Elliot Morley: The hon. Gentleman clearly feels strongly about this issue, Mr. Speaker, but his concerns are premature. An energy review is under way, but there is a bit of an obsession with its nuclear energy component. It is right and proper that it should be part of the review, but issues such as costs and the energy mix will be taken into account and there will be an opportunity to comment. The hon. Gentleman said, perfectly reasonably, that there has not been a solution to the long-term storage of nuclear waste for decades. In the previous attempt, Nirex made a recommendation for deep storage, which was the subject of a public inquiry in 1996, but it was turned down for various reasons. Personally, I did not think that the process was as open and inclusive as it should have been. We do not intend to make that mistake with Corwm, which has considered all the options and narrowed them down to a number—

Mr. Speaker: Order. We must move on.

Rural Development (EU Budget)

David Drew: What assessment she has made of the likely effect on rural development of the recent EU budget deal.

Margaret Beckett: I am pleased with the outcome of the EU budget deal. Member states now have greater freedom to transfer funds from pillar one to pillar two, which gives us the flexibility to deliver our ambitions on environmental stewardship and rural development. The deal also secured a review clause, which will lead to a full reassessment of common agricultural policy funding.

David Drew: I have just returned from Brussels with the Select Committee on Environment, Food and Rural Affairs. It was depressing that the one area in the negotiations to be sacrificed was pillar two, which includes rural regeneration. We are not alone in our approach to those negotiations, but until we make a serious effort to move moneys out of production subsidies into support for rural areas, we will have a dysfunctional CAP and, dare I say, even worse. Will my right hon. Friend confirm whether that is the Government's intention?

Margaret Beckett: I rather share my hon. Friend's view. It is somewhat depressing that a substantial number of member states were wholly unwilling to make any change in production subsidies under pillar one. That had a knock-on effect on pillar two. That is why it was important to us to get the flexibility of further voluntary moves of moneys from production subsidy into other payments under this heading, because we believe that that is the right direction for farming not just in the UK, but right across the European Union. As a result of that additional flexibility, other member states, particularly the new members, may be willing to undertake such moves, whereas they were not willing to do so before because all the modulation was compulsorily co-funded, and that presented them with a budget difficulty. My hon. Friend is right about the direction in which we believe funding should move and we will continue to press for it, as the UK did during the negotiations, although this was a presidency deal.

Henry Bellingham: As part of the recent EU budget deal, substantial changes were agreed to the beet regime. Will the EU compensation for beet growers, many of whom are in East Anglia, be directed at the growers themselves, or will it simply be absorbed into the single farm payment across the whole country?

Margaret Beckett: We have yet to get further guidance and further detailed information from the Commission about how exactly compensation for sugar producers will be handled, but I envisage that ultimately it probably will be integrated into the single payment scheme. We have to consider how that will be taken forward.

Climate Change Targets

Shailesh Vara: If she will make a statement on recent progress towards meeting the UK climate change targets.

Elliot Morley: Latest estimates of the UK's emissions show that greenhouse gases will be around 19 per cent. below base levels during the 2008 to 2012 Kyoto protocol period. We therefore remain on course to achieve comfortably the UK's Kyoto target. Domestic CO 2 targets are currently subject to the climate change review.

Shailesh Vara: Last year, aviation CO 2 emissions increased by 12 per cent. The aviation White Paper envisages a trebling of airport capacity in the south-east. What specific measures is the Minister proposing to ensure that, despite the increased airport capacity, aviation CO 2 emissions will decrease, rather than continue to increase?

Elliot Morley: Our preferred option is to include aviation in cap and trade schemes. I am glad to say that, under the UK presidency, we reached political agreement that aviation will be included in the EU emissions trading scheme. There may well be a case for further measures, which should be considered on their merits.

Edward Balls: My right hon. Friend the Secretary of State made it clear in an earlier answer that, to achieve progress on meeting our climate change objectives, we need measures and action rather than press statements and warm words. The climate change levy is such a measure. May I urge Ministers not to wait for others to make proposals, but to lead an effort to build a cross-party consensus in support of the climate change levy, or do they think the position is hopeless?

Elliot Morley: I am surprised at the position of the Conservative party on the climate change levy. There have been independent assessments of its effectiveness, and we know that it has been effective. It has reduced emissions by millions of tonnes in the UK. It is not an easy decision to put such a measure in place, but we must do so if we are serious about tackling climate change.

Gregory Barker: A far more ambitious and radical strategy for renewable microgeneration and decentralised energy is essential to help Britain meet its long-term climate change targets, so apart from welcome first steps in the Climate Change and Sustainable Energy Bill going through Committee, why are the Government not doing more actively to promote market conditions in which new British microgeneration technologies can break out of their niche and into the mass domestic consumer market?

Elliot Morley: We are taking action, and microgeneration could have a significant role to play in this country in contributing to renewable energy. A Department of Trade and Industry working group is considering potential barriers to the expansion of microtechnology, and it is not impossible that we might support microtechnology as part of our Warm Front programme, or the energy efficiency commitments, under which there is a pilot scheme to fit micro-wind generators, which are UK produced. I am sure that there are further measures that we could consider.

Warm Front Scheme

Joan Ruddock: What assessment she has made of the likely effect of the Warm Front scheme on climate change.

Elliot Morley: The Warm Front scheme offers a range of heating and insulation measures to vulnerable householders across England in receipt of certain benefits. As well as tackling fuel poverty, this will reduce emissions in the household sector. We estimate that Warm Front will save 0.3 MtC—million tonnes of carbon—by 2010, and that savings from similar programmes across the UK will be around 0.4 MtC by 2010.

Joan Ruddock: My hon. Friend will know that domestic energy demand has risen by 40 per cent. in the past 15 years. Will he ensure that people become much more aware of the savings that they can make, not just through these schemes, but through the variety of Government strategies that are available? Will he use his influence around Government to ensure that, during the energy and climate change reviews, domestic energy use, conservation, efficiency and microgeneration, to which he has alluded already, are given as much attention as the question of whether electricity generation should be nuclear or not?

Elliot Morley: Eaga, which delivers our Warm Front campaign, has constituency packs available for all Members of the House, which give details of the number of houses that have received benefits under Warm Front, and also ways of publicising it. The scheme is making an important contribution to climate change targets, although more can be done, but it is worth emphasising that it is designed to combat fuel poverty, and the total of 4 million people in England who were in fuel poverty in 1996 has been reduced to 1 million under this Government.

Business of the House

Theresa May: Will the Leader of the House give us the business for the coming week?

Geoff Hoon: The business for next week will be as follows:
	Monday 6 February—Motions relating to the police grant and local government finance reports.
	Tuesday 7 February—Opposition Day [13th Allotted Day]. There will be a debate on the future of mental health services, followed by a debate on the reorganisation of primary care trusts, strategic health authorities and ambulance trusts.
	Wednesday 8 February—Business of the House motion, followed by motions relating to parliamentary allowances and financial assistance for the representative work of Sinn Fein.
	Thursday 9 February—Second Reading of the Legislative and Regulatory Reform Bill.
	Friday 10 February—The House will not be sitting.
	The provisional business for the following week will be:
	Monday 13 February—A motion to approve a money resolution on the International Development (Reporting and Transparency) Bill, followed by consideration of Lords amendments to the Identity Cards Bill.
	Tuesday 14 February—Remaining stages of the Health Bill.
	Wednesday 15 February—Motion to approve a Statutory Instrument relating to the Renewal of the Prevention of Terrorism Act 2005, followed by consideration of Lords amendments to the Terrorism Bill.
	Thursday 16 February—Motions relating to the draft Social Security Benefits Up-Rating Order 2006 and the draft Guaranteed Minimum Pensions Increase Order 2006, followed by a debate on tackling health inequalities on a motion for the Adjournment of the House.
	Friday 17 February —The House will not be sitting.

Theresa May: We are now two months away from the start of the Easter recess, and unless we are given the date of the Budget now, the advice of the Treasury Committee on giving good notice of the date of the Budget will have been ignored. Will the Leader of the House tell us when he will be giving us the date of the Budget?
	I have asked the Leader of the House every week for a debate on the health service and that request has been ignored. I am pleased to say that hon. Members will indeed be able to raise their concerns about their local health services next week, but in Opposition time, because we think that it is an important subject that should be debated in this House. Can the right hon. Gentleman confirm that Labour Members will be entirely free to raise their concerns about the health service in that debate, although I am not sure whether the Labour Chief Whip is in a position to stop them?
	Talking of the Chief Whip, I have regularly raised the issue of the forthcoming Cabinet reshuffle and the vacant post of Chancellor of the Duchy of Lancaster. Perhaps the right hon. Gentleman can answer that question this week, although it may not be the only post to be filled. Hon. Members may be interested to know that the right hon. Gentleman has been tipped as a future Chief Whip—no greater curse could man have than that.
	Those who attend business questions regularly know that the right hon. Gentleman has kept us updated on the odds on the hon. Member for Somerton and Frome (Mr. Heath) in the Liberal Democrat leadership contest. I have been looking at some odds, too: the odds on the right hon. Gentleman becoming Chancellor of the Exchequer are 26:1; sadly, the odds on his becoming leader of the Labour party are somewhat longer at 799:1.

Mr. Speaker: Order. I am wondering what that has to do with the business for next week.

Theresa May: I like to keep you in a state of anticipation, Mr. Speaker.
	If I were the right hon. Gentleman, I would be worried, because the odds on the Chief Whip becoming leader of the Labour party are shorter than the odds on him. Can he confirm that the Chief Whip attacked the hon. Member for Bethnal Green and Bow (Mr. Galloway) for being in the Big Brother house and not voting in this House? The hon. Member for Bethnal Green and Bow voted with the Government on the Racial and Religious Hatred Bill, while the Chief Whip told the Prime Minister that he did not have to.
	In order to ensure proper debate, can the right hon. Gentleman confirm that the education reform Bill will be published in good time for hon. Members to scrutinise it properly before Second Reading? Will the Government provide two days of debate on Second Reading, which would allow enough time to air all the issues and for Ministers to explain their position—and would also give the Chief Whip, whoever they may be, ample time to ensure that Government Members are present to vote?
	The business for the week beginning 13 February is very heavy, with the Identity Cards Bill and the Terrorism Bill. However, that week is half-term week for many schools and for many hon. Members' families. The move to a half-term parliamentary recess was designed not only to give hon. Members an opportunity to be in their constituencies, but as a modernising, family-friendly move. Will the right hon. Gentleman explain why the half-term recess is in the following week? I am sure that the fact that the following week is half-term week in Derbyshire, where the right hon. Gentleman has his seat, has absolutely nothing to do with it.

David Taylor: Nottinghamshire.

Theresa May: In that case, perhaps the timing has something to do with the fact that the Opposition deputy Chief Whip has his seat in Derbyshire. That week has been loaded with serious business, but many hon. Members were hoping to spend time with their families. Is that a sign that the Government are abandoning family-friendly policies, or is it just a Government ploy to ensure that Labour rebels are not here to vote?

Geoff Hoon: I am grateful to the right hon. Lady for her entertaining run through the current issues. I shall do my best to respond, although perhaps not in kind.
	I have made it clear that the date of the Budget will be announced as soon as the Government are ready to announce it.
	Although the health debate clearly gives informed, thoughtful, considerate Labour Members an opportunity to set out the excellent way in which the health service has been funded and reorganised in recent times, I am sure that we all look forward to discovering whatever is the latest policy from the Conservatives. It clearly will not be the policy on which hon. Members fought the last general election, since the Conservative party seems to be junking each and every piece of that policy not only week by week, but day by day. So perhaps it would be a good opportunity, although I remind the right hon. Lady that I announced a debate on health inequalities in Government time in direct response to the request that was made previously.
	As for the appointment of the Chancellor of the Duchy of Lancaster, perhaps I should refer the right hon. Lady to the answer that I gave last week, and indeed the week before that. I am not aware of any impending change in that regard. I am sure that the Under-Secretary of State for the Cabinet Office, my hon. Friend the Member for East Renfrewshire (Mr. Murphy), who has assumed those responsibilities, will continue to do the excellent job that he has been doing for some time and may well be doing for some time to come.
	On the education Bill, there are proper traditions about the time available to hon. Members for considering a Bill before Second Reading, and I see no reason why it should be necessary to depart from them.
	I share the right hon. Lady's concern about the half-term recess dates, which I had a great deal of difficulty in trying to organise. Unfortunately, just over half the local authorities in the country have their half-term in the week commencing 20 February and just under half have it in the week commencing 13 February. It would clearly be helpful in the organisation of business if our local authorities could agree on a single period. I am sorry that the whipping for that week is likely to be high, but that reflects the Government's commitment to some rather important issues that have to be dealt with in that week. Notwithstanding determined efforts on all sides, it has not been possible to find a lighter work load for that period.

Angela Smith: My right hon. Friend will be aware of the announcement made this morning that identity theft is costing the people of this country £1.7 billion a year. I hope he agrees that a debate on that problem would be useful, not only in highlighting the distress caused to our constituents by this crime but in focusing on what can be done to tackle it.

Geoff Hoon: My hon. Friend is absolutely right. What is disappointing about the attitude of many Conservative Members is that while they concentrate their criticisms on, for example, aspects of the use of identity cards in relation to the public sector, the private sector—particularly the banking and credit card industries—suffers very significant financial losses as a result of identity fraud. There is no doubt, as those organisations argue, that the availability of an identity card system will have an enormous impact on reducing the level of fraud. I am sorry that Conservative Members, who otherwise claim to represent the interests of business and the financial community, have failed to take account of that.

David Heath: Last week, when I asked the Leader of the House about the Government's Arbuthnott report, an expression of utter vacuity crossed his face, so this week I shall try to ask about subjects that he has at least heard of.
	Will the Leader of the House set aside two hours for statements—one from the Secretary of State for Environment, Food and Rural Affairs on why stringent carbon emission controls on industry are necessary, followed by another from the Secretary of State for Trade and Industry on why they are not? From that, we may be able to assess some form of coherent climate change strategy.
	May we have a debate or a statement on the Child Support Agency? We were told eight years ago that it was in urgent need of reform, and two months ago the Prime Minister himself said that it was not fit for purpose. We are still waiting for an announcement on the fundamental reform of the CSA that is clearly necessary.
	I understand the Leader of the House's difficulties with half-term coinciding with a week of business but does he believe that it is wise, given Tuesday's events, to schedule three controversial Bills for that week? Would it not be better to leave a little extra time for the Chief Whip to understand what is happening in the party and for the Prime Minister to plan his diary engagements?

Geoff Hoon: The Government remain committed to tackling climate change and we continue to review our climate change programme. We have made remarkable progress. If the hon. Gentleman examined the international negotiations that we have led and their results, he would praise the United Kingdom and our efforts to deal with the issue. We are one of only two EU15 countries that are on track for delivering the Kyoto targets. The hon. Gentleman should congratulate the Government on that rather than making carping observations. His party only talks about climate change and has no responsibility for doing something to achieve progress.
	The same applies to the hon. Gentleman's observations about the CSA. Its organisation has faced problems over the years but it also provides significant help to some of the most vulnerable families in our community. Although it needs to improve its organisation, and determined efforts are being made to achieve that, we should not overlook the considerable good that it does throughout the country.
	I will not add much to my comments about the arrangements for half-term. I made the Government's difficulties clear. Several important items have to be tackled and I hope that the hon. Gentleman understands that such decisions are not taken lightly. They have to be taken to allow progress to be made on the Government's legislative programme. I hope that he understands that that is the position.

Jim Sheridan: This Sunday will be the second anniversary of the tragic deaths of 23 cockle pickers in Morecambe bay. My right hon. Friend knows that the House approved legislation to go some way towards preventing such disasters from happening again. Despite that, the Government have not yet implemented the Gangmasters (Licensing) Act 2004. If there is further delay, illegal gangmasters will have yet another year to operate in the twilight world. I have personally tried to find out where the blockage is, but it is like knitting fog. Will my right hon. Friend identify the blockage and use his influence to unblock that necessary legislation?

Geoff Hoon: I am grateful to my hon. Friend for raising an important issue. He rightly acknowledged that the Government took prompt action to deal with the matter through legislation. It is obviously important that it should be implemented. I shall ensure that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is made aware of my hon. Friend's observations.

Michael Spicer: Will the Leader of the House confirm that, by order of the House, the Senior Salaries Review Body is automatically bound to review Members' salaries this year?

Geoff Hoon: The timing of the arrangements is subject to consultation but there is a regular process for reviewing salaries and arrangements and the SSRB is keen to get that under way in due course.

Kate Hoey: Will the Leader of the House arrange for the Secretary of State for Work and Pensions to make a statement as soon as possible on the future of the Post Office card account? He will have seen early-day motion 1531.
	[That this House is gravely concerned by the Department of Work and Pensions' (DWP) decision to withdraw support for the Post Office Card Account when the existing contract expires in 2010 and in particular by the Department's attempt to kill off the Account in advance of 2010, through pilot schemes being introduced immediately when it will deny to new benefit claimants the option of opening a Post Office Card Account, inform 35,000 existing customers that they will have to use a bank or building society instead of the Post Office Card Account and require them to provide their account details, and pay benefits of 2,500 existing customers into a bank account rather than the Post Office Card Account, ignoring the preferences they made when their benefit books were stopped; condemns the fact that, in breach of all plans, these pilot schemes are being introduced without consultation; and calls on the Government to halt these pilot schemes immediately and to institute an immediate review of the DWP's proposal to abolish the Post Office Card Account by 2010.]
	It has attracted more than 100 signatures in 24 hours. With few days' consultation, the Department for Work and Pensions is introducing pilots in February that will make it difficult for people who are beginning to receive pensions or benefits to use the Post Office card account. That constitutes an out-and-out attack on the Post Office card account. It was mentioned last week and everyone is concerned. We need a statement. Will my right hon. Friend speak to the Secretary of State for Work and Pensions?

Geoff Hoon: The matter can be raised on Monday when my right hon. Friend the Secretary of State for Work and Pensions comes to the House to answer questions. However, let me make it clear that the purpose of the arrangements is to allow those who use the existing Post Office card account system to use equally simple and straightforward Post Office accounts at their local post office. The purpose of the pilots is to provide that opportunity, thus allowing people to continue to use facilities in the post office. The arrangements for the card were designed to be interim arrangements to give people an opportunity of developing the use of other sorts of simple, straightforward bank accounts at their local post office. Our approach is entirely consistent and I hope that my hon. Friend and other hon. Members support it.

Peter Bottomley: I hope that the Leader of the House will look again at his answer to the hon. Member for Vauxhall (Kate Hoey), because it can be very difficult for people to set up a bank account if they do not have a long residential record.
	I want to ask the Leader of the House a question about audiology. The Government rightly assert that they are paying a lot of attention to cutting waiting times and waiting lists, but those involve consultant-led services. The length of time that it takes to get a hearing test in a hospital, and then to have a hearing aid fitted, ranges from about six months to four years, although I have been told that it can be as much as six years. I know that the Government are proposing to introduce changes that will result in an 18-week waiting time, but is that the waiting time for the hearing test or for the hearing aid?

Geoff Hoon: On the hon. Gentleman's first observation, those arrangements are clearly designed to allow the use of some very simple and straightforward Post Office accounts at a local post office for those people who, so far, have relied on the Post Office card account. The pilots to which I referred are designed to allow people to use that facility until 2010, so this is not an overnight change; it will be signposted well in advance. Many of the Post Office accounts are simple, straightforward and easy to use; they are no more complex than the card account. In the light of that, I hope that the hon. Gentleman will support this process.
	On audiology, I will certainly ensure that my right hon. Friend the Secretary of State for Health is made aware of the hon. Gentleman's concern. I will ask her to write to him directly about it. It is obviously important to the Government to ensure that waiting lists come down right across the range of services and facilities offered by the national health service. The Government have had remarkable success in reducing those waiting lists, and we want to ensure that that affects every part of the health service.

Andrew MacKinlay: We shall have a free vote on next Wednesday's business on allowances for Sinn Fein, so I shall have to think for myself. Will the Leader of the House kindly help me by clarifying one or two points? As I understand it, one of the resolutions before us will not only restore the allowances that were taken away but give a new, additional allowance exclusively to Sinn Fein, which will be better than the Short money that the Conservatives and the Liberals get. Resolution 45 uses the words
	"in relation to the party's representative business."
	That is much more widely drawn than the definition given to my hon. Friend the Member for Houghton and Washington, East (Mr. Kemp) in recent replies to questions about Short money. This will be Hain money—or Sinn Hain money, if you like. It will be a new allowance, and I am not persuaded that it can be justified by any of the criteria that have been laid down for the receipt of Short money.

Geoff Hoon: I have always defended my hon. Friend's right to think for himself, even if the consequences have sometimes been difficult for some of my right hon. Friends. I am not going to have the debate now that I have set for next Wednesday. The House will have the opportunity on that day to discuss the issues that my hon. Friend has raised, and then to decide, on a free vote—it is a House matter—whether the allowances should be restored or granted.

Peter Robinson: Continuing with the subject of Wednesday's business, is it true that the Leader of the House wants to curtail the time spent discussing the allowances to Sinn Fein because a Labour bash is being held somewhere else in the precincts of the House at the time? Will the right hon. Gentleman remove that business entirely from Wednesday's schedule, on the basis of the answer that he gave to my hon. Friend the Member for Belfast, North (Mr. Dodds) and me last week, which was that he could not justify such payments if the IRA was continuing with its criminality?

Geoff Hoon: Again, I shall not get into the substance of that debate now. I am not aware of any Labour bash taking place on Wednesday evening—[Interruption.]—although a photograph is to be taken at the end of business on that day. However, I can assure the hon. Gentleman that, in the normal timetable for Wednesdays, there will be plenty of time available to debate these issues. I look forward to all the parliamentary Labour party participating in the debate, because I am sure that they will want to be in the centenary photograph that will be taken that evening. As far as the debates are concerned, there will be ample time for the House to discuss these important issues.

Jim Devine: My right hon. Friend will be aware of my early-day motion 1421.
	[That this House believes that the Scottish Parliament should follow the lead of the Welsh Assembly and introduce guidelines for all political parties that ensure that candidates for election cannot stand for both the list and the constituency.]
	The motion now has the support of nearly 90 hon. Members and many other people. Will my right hon. Friend set aside some time for a debate on this issue? It was discussed in another place yesterday. Does my right hon. Friend agree that losers should not be winners, and that they certainly cannot be leaders?

Geoff Hoon: I know that this is an important issue north of the border and, if I can put it this way, west of the border. The matter has been debated in another place, and it is important that this House should have the opportunity to consider it. I am sure that that will be the case in due course.

Andrew MacKay: On reflection, does the Leader of the House think that he was entirely fair to the Liberal Democrat spokesman when he accused him of carping? Surely the hon. Member for Somerton and Frome (Mr. Heath) was right to point out the complete lack of joined-up government on the important issue of climate change, with two Departments using different statistics and coming to different conclusions. May I encourage the Leader of the House to add to his modernising and innovating credentials by arranging for a joint statement to be made by those two Departments, with two Ministers at the Dispatch Box to answer our questions; otherwise, we shall not get any answers on this subject?

Geoff Hoon: If it is now the position of the Conservatives to defend their poor, unfortunate colleagues on the Liberal Democrat Benches, I am sure that the country will welcome the close association between two such dissimilar parties. Nevertheless, I shall stand by my use of the word "carping". What characterises both Opposition parties in this regard is their complete failure to address the issues that are relevant to resolving the problems of climate change. The Government have addressed those issues with remarkable success, both domestically and internationally. I had the opportunity this morning to listen to one of the Conservative spokesmen on the radio, who seemed to have decided that the Conservatives would resolve those problems simply by handing them over to a group of scientists. That might be one way of avoiding responsibility, but I suspect that it would not be wholly welcomed by Britain's business community.

Jessica Morden: Given the importance to the voluntary sector of the provisions in the Charities Bill, will my right hon. Friend tell us when we shall have the debate on its Second Reading?

Geoff Hoon: I cannot give my hon. Friend a specific date for that debate. This is an important matter for the Government, however, and I will ensure that the House is given early notice of the debate, as ever.

Edward Garnier: May we please have a debate on the National Offender Management Service, urgently and in Government time? The Leader of the House will know that NOMS, as it is called, covers both the Prison Service and the probation service. I was alarmed to discover from the parliamentary written answer that I received this morning—and which will no doubt appear in today's Hansard—from the Under-Secretary of State for the Home Department, the hon. Member for Slough (Fiona Mactaggart), that only 3 per cent. of the Prison Service budget is spent on education. Is that not an alarmingly small amount, given that 67 per cent. of prisoners reoffend within two years of their release? Surely it is high time that the Government spent more of the Prison Service budget on educating prisoners, to reduce the rate of reoffending.

Geoff Hoon: I share the hon. and learned Gentleman's view of the importance of education, especially for young offenders, but also for the general prison population. One of the key challenges is to ensure that those who serve time in prison receive the training and education that will allow them to secure employment thereafter. The National Offender Management Service is looked at closely by my right hon. Friend the Home Secretary on a regular basis.

Clive Betts: Following reports in some sections of the press last week about proposals for unwarranted and wholesale demolition in housing market renewal areas, will my right hon. Friend arrange for a debate about pathfinder schemes? Some of us could then give credit to organisations such as Transform South Yorkshire, which have responded well and consulted properly with our constituents about some radical but constructive proposals for regeneration in those areas. It would also be a good opportunity to allay the fears raised by some of those unwarranted and inaccurate press reports.

Geoff Hoon: I am grateful to my hon. Friend, who has considerable knowledge and experience of the way in which particular local authorities participate in partnership with the Government in improving housing stock. He is, of course, right that it is not simply a question of demolition—which has attracted a great deal of unreasonable press interest—but a question of considering our housing stock and determining what is the best way to improve it. In some cases, it is a matter of clearing land in order to allow for new build, while in others, it is a question of spending significant amounts of money on revitalising existing houses and making sure that they are fit for the 21st century.

Alan Reid: To echo Members who have spoken previously, may we please have a statement on the disgraceful decision of the Department for Work and Pensions to abolish the Post Office card account? May we also have a debate and a vote on that? Surely, in view of the number of signatures on the early-day motion, the Government cannot abolish the card account without a vote in Parliament. May we also have a debate on the implications for small post offices? The Royal Mail's universal service obligation gives little protection to rural post offices. For example, within the PA postcode area, the Royal Mail could shut every post office on every island in my constituency and still conform to the terms of the USO. That is completely unacceptable, and surely it must be altered.

Geoff Hoon: I have made it clear to the House that this issue is still under discussion. The Post Office card account was always intended to be a transitional arrangement, and there are other ways of solving the problem. Part of the issue is ensuring that local rural post offices continue to be available to the communities that they serve so well, and that is at the forefront of the Government's mind. After all, that was why the card was introduced in the first place. We are not about to abandon the success of the card—we want to ensure that it continues, but in an appropriate way.

Brian Jenkins: Will my right hon. Friend find some time, rather urgently, to allow the Department of Trade and Industry to explain to the House why it is spending money and resources on a cost-benefit analysis of the possible extension of Sunday trading? Such a move is not wanted by the majority of supermarkets, employees or the public, and, judging by my early-day motion, might not secure the support of the House. Would it not have been better for the DTI to secure the support of the House in principle before expending that money, which could have been better spent on combating the erosion of British manufacturing jobs?

Geoff Hoon: Without challenging in any way the assumptions underlying my hon. Friend's question, it is important that we identify whether there is a demand from the public, supermarkets or other shops for a different arrangement for Sunday trading. I would have thought, given the premise of his question, that he welcomed the expenditure in order to identify more accurately the position on Sunday trading.

Shailesh Vara: The European Union will shortly embark on a review of the European wine industry. May we have a statement from the Secretary of State for Environment, Food and Rural Affairs to ensure that Britain's embryonic wine industry is well protected in that review?

Geoff Hoon: I shall treat that as an application to join in the test. Certainly, the review is important to this growing UK industry. Having had the opportunity of sampling English wine at a number of recent Foreign Office dinners, I recognise the great contribution that that industry is beginning to make.

Russell Brown: While I am pleased with the Leader of the House's response to my hon. Friend the Member for Livingston (Mr. Devine), I would be absolutely delighted if he could be a little more forthcoming about a debate on the Arbuthnott report. He will be aware, now that he is fully briefed, that the report raises many issues. It is worrying that, on something as simple as Scottish parliamentary and Westminster constituencies having coterminous boundaries, the commission does not appreciate the need for urgency. Surely the public deserve better than that. I am sure that the Leader of the House will understand that there is a more urgent need for a debate.

Geoff Hoon: I have reflected on several occasions that one of the joys of this job is that one learns ever more about the variety of issues affecting government right across the United Kingdom, if I can put it in that way. I recognise the concern, and I have already said that it has been discussed in another place. Having spent some considerable time studying the wide variety of forms of proportional representation, I understand some of the technicalities involved and recognise the concerns that arise.

Simon Burns: Will the Leader of the House have a word with his Cabinet colleagues to try to persuade them to stop the increasing trend for named day written questions to receive holding answers?

Geoff Hoon: I recognise that that is of grave concern to right hon. and hon. Members. It is important that answers are given as early as is possible, but I hope that the hon. Gentleman and other Members will accept that it is also important that Departments have the opportunity to produce accurate and detailed responses to such questions. From time to time, that necessitates the issuing of a holding answer. All Departments are made aware that the mechanism should be used only in specific and particular circumstances.

David Chaytor: Last week, the Government published the terms of reference for the energy review, which is due to be published before the summer recess, by which time the report of the Committee on Radioactive Waste Management will also have been finalised and the climate change review should have been completed. The Stern report on the economic implications of climate change, however, will not be published until the autumn. Will the Leader of the House accept that it would be more sensible if the Stern report were available before final decisions are taken on the energy review? Can he find time for a debate on the subject in the near future so that all those issues can be discussed?

Geoff Hoon: I have had cause to reflect on previous occasions on my hon. Friend's expertise and knowledge in this area. I recognise that, consistent with the kinds of questions that I have been asked already today, climate change is not an issue on its own. It has significant implications across the board, not least economic ones, and the Government take those seriously in relation to often difficult decisions and judgments. Certainly, I recognise the importance of taking account of the economic consequences of climate change.

Annette Brooke: Given the mounting concerns expressed at Prime Minister's questions yesterday, DEFRA questions today and in an early-day motion about the proposed cuts relating to the Centre for Ecology and Hydrology, which has sites across the country including an important one in Dorset, does the Leader of the House share my concerns about the potential long-term implications for the United Kingdom's science assets and scientific base? Does he feel that there should be some parliamentary input into the consultation? There is a real danger that a decision could be taken without any democratic input.

Geoff Hoon: This issue has now been raised twice in two days. The hon. Lady cannot say that there has not been some democratic input, given the questions raised not only with me but with my right hon. Friend the Prime Minister. The Government are committed to improving the United Kingdom's science base, into which we have put a great deal of extra resources. We have encouraged the development of science in the UK because we recognise that that is important not only in terms of understanding the implications of policy for the future in areas such as climate change but as a vital contribution to our future economic fortunes.

David Taylor: Student debt is a persistent and growing problem, and nowhere is that more true than in nursing and midwifery, which has a high attrition rate of almost a quarter because of financial problems. Early-day motion 197, tabled by the hon. Member for Calder Valley (Chris McCafferty) following a campaign by the Royal College of Midwives, drew attention to that, and called for a non-means-tested £10,000 bursary.
	[That this House recognises the vital role that midwives play in the NHS; notes that many student midwives face financial problems during their training and that according to the Royal College of Midwives' poll, around a fifth of midwives fail to complete their studies due to financial hardship; and therefore supports the RCM campaign to provide a £10,000 non-means tested bursary for all student midwives, ensuring more students are attracted to midwifery, are able to complete their course and go on to become practising midwives.]
	My constituent Andrea Simpson of Donington le Heath has compiled a very large petition online, which I hope to present to the House next week. Will the Leader of the House try to find an opportunity in the coming weeks for us to discuss that important aspect of finance for vocational training? People such as my constituent are key to the provision of quality services in the NHS and elsewhere.

Geoff Hoon: My hon. Friend is right to raise that important issue. No one underestimates the importance of vocational training and of ensuring that students engaged in such courses have proper financial support. I hope that if my hon. Friend looks at the statistics relating to those who have undertaken such courses, and the increasing number available to the NHS in the context that he cited, he will accept that the position is not as bleak as his question implied; but obviously we keep it under review. We have a strong commitment to vocational training, which not only benefits parts of the NHS but makes a vital contribution to our wider economy.

Pete Wishart: May we have a debate about current trends in the Scottish economy, so that we can discuss the complacent and arrogant attitude of the Chancellor and the Secretary of State for Defence? Last week 720 jobs were lost at Lexmark in west Fife, following the loss of 1,600 jobs at Rosyth dockyard, in the same constituency. As if that were not bad enough, 7,000 manufacturing jobs have been lost in Fife alone. Given that appalling record, it is any surprise that people are turning away from Labour in droves, forgoing their complicit Scottish Executive buddies in the Liberal party and turning to the Scottish National party?

Geoff Hoon: No doubt the raising of that issue here has saved the Scottish National party a certain amount of money for its campaign in Dunfermline, but I am confident that it will result in the election of another Labour Member of Parliament to continue the excellent work of the former Member, Rachel Squire. She was a friend of mine and a remarkable Member of Parliament, and I regret her loss.
	The economy of the United Kingdom and that of Scotland have, in fact, never been stronger. I should be intrigued to know—I shall not give the hon. Gentleman the opportunity to tell me now, but perhaps he would like to write to me—exactly what prescriptions the Scottish National party would set out for the economy of Scotland. The economy of Scotland is doing extremely well under a Labour Government, and while obviously we regret job losses—particularly on the scale that we have seen recently—one of the remarkable features of the current economy is that those who are losing employment have an opportunity, for the first time in more than a generation, to secure alternative employment. The Government have invested an enormous amount of resources in ensuring that they are given appropriate training and education so that that can happen.

Bernard Jenkin: Do the Leader of the House and the Government agree that the reporting of Iran to the United Nations Security Council is a very serious matter, reflecting a grave international crisis that is preoccupying every major power on this earth? I realise that we are to have a defence debate this afternoon, but a 12-minute limit on speeches has been imposed, and the debate is meant to be about procurement, not just about Iran. Would it not be sensible for the Government to hold a full day's debate on Iran, so that the House can be fully informed about where this development is leading our own Government?

Geoff Hoon: The Government have serious concerns about Iran's policies, and not least about such aspects as its nuclear and ballistic missile programme. That is why we have engaged with other members of the EU3, why we have taken up the issue internationally, and why we continue to regard developments in Iran with great concern. I share the hon. Gentleman's anxiety, and will consider the possibility of a debate in due course.

Prevention of Terrorism Act

Charles Clarke: With permission, Mr Speaker, I should like to make a statement on the renewal of the Prevention of Terrorism Act 2005.
	I have today laid before Parliament Lord Carlile of Berriew's report on the operation of the control order regime under the Prevention of Terrorism Act 2005, and an order to extend the life of that Act for a further 12 months. I am very grateful to Lord Carlile—as I am sure the whole House will be—for the customary diligence and care with which he approached his task.
	Overall, I believe that the report endorses the current operation of the control order system. Paragraph 61 states:
	"As a last resort (only), in my view the control order system as operated currently in its non-derogating form is a justifiable and proportional safety valve for the proper protection of civil society."
	Lord Carlile also states, in paragraph 38, that in the 18 cases in which control orders have been made,
	"I would have reached the same decision as the Secretary of State in each case in which a control order has been made."
	Lord Carlile has made a number of recommendations to improve the operation of the control order regime, including the monitoring of each case to ensure that the restrictions imposed are the minimum necessary consistent with the safety of the public, and fuller information from the police about why they believe it would not be possible to mount a prosecution rather than relying on a control order. I have considered each of Lord Carlile's recommendations, and in principle I accept them. I am currently consulting, as required by the Act, the Intelligence Services Commissioner and the director general of the Security Service, and will take their views into account before making final decisions, on which I will report to the House during the debates on the renewal order. No recommendation made by Lord Carlile requires primary legislation, and it is on that basis that I have laid the renewal order today. It will be fully debated in both Houses, and all Members will have an opportunity to debate Lord Carlile's report and our response to it. Of course I hope that the order will be supported.
	The last stage of the Prevention of Terrorism Act was a significant parliamentary occasion that all members of this House will remember well. During that debate, I made a commitment to timetable further counter-terrorism legislation for spring this year, so that Lord Carlile's report would be available to inform the House when it considered any amendments to the control order legislation. I gave that commitment in the context of an announcement I had already made that we would introduce legislation to give effect to new offences of terrorism. The House will know that the tragic events of 7 July changed the timetable for the introduction of that legislation. With the agreement of all parties, we decoupled that legislation from further parliamentary consideration of control orders and presented it in October, in the Terrorism Bill that is currently before Parliament. In July, I said that I would return to the issue of control orders in the spring.
	On receiving Lord Carlile's report, I was left to consider the merits of introducing a Bill that would have little content, but would enable hon. Members to table amendments to the Prevention of Terrorism Act. In doing so, I noted the following points.
	First, Lord Carlile's report emphasises that there has not yet been a complete cycle of control orders, in that legal challenges brought by those who have been the subject of control orders have not yet been completed and therefore tested in the courts. I think that final conclusions on the operation of the whole control order regime would therefore be premature.
	Secondly, there are three very important pieces of work that are being done this year, which I want to be able to take into account before presenting legislation on counter-terrorism. The first is Lord Carlile's review of the legislative definition of terrorism, which was promised during the passage of the Terrorism Bill and has been a significant part of the debate in both Houses of Parliament. The second is his report on the operation of the current Terrorism Bill, once passed, and in particular the measure to lengthen the period of detention without charge to 28 days, which has been the subject of great debate in both Houses. The third is the work that the Government are undertaking to find, if possible, a legal model that would provide the necessary safeguards to allow intercept material to be used as evidence. That has been raised in many parts of the House. Each of those pieces of work has been of considerable importance to Members in all parts of this House during our debates, and in my view will demand attention before we decide the details of how to proceed on terrorism legislation.
	I am conscious that our terrorism legislation is now split between several different Acts of Parliament, and that the principal Act, the Terrorism Act 2000, has been subject to multiple amendments. That, as Lord Carlile among others has noted, is confusing, and I am keen to ascertain whether a way could be found of consolidating all our counter-terrorism legislation in a single, permanent Act. When I expressed that hope on Third Reading of the Terrorism Bill on 10 November 2005, the Opposition parties were good enough to say that they might be prepared to co-operate in such an endeavour.
	For all those reasons, I have decided not to introduce further legislation on terrorism now, but to plan for the development of a draft Bill that takes into account all the work that I have laid out, to be published in the first half of 2007 for pre-legislative scrutiny. Depending on the outcome of that scrutiny, we will seek to introduce the legislation later that year.
	It is a matter of genuine regret to me that—despite very positive discussions between the parties at the beginning of last year, following the House of Lords judgment on Belmarsh, and during the summer of last year after 7 July—any consensus reached has never held during the passage of subsequent legislation. It is unarguable that it would be better by far if the next counter-terrorism Bill had the support of all parts of the House. The timetable that I have set out offers us that opportunity and, for my part, I am determined to take it, working with the whole House.

David Davis: I begin by thanking the Home Secretary for making his statement to the House today, and for his courtesy in allowing me advance sight of the documents. My saying so is not just a formality—we were given serious advance sight of those documents.
	The review and renewal procedure for control orders is the consequence of the enormous battle that took place in the House of Commons before the last general election. In my judgment, it demonstrates that that debate, in which we heard brave and passionate contributions in defence of British freedoms from all parts of the House, was worth while. The Home Secretary was right to say that Lord Carlile's report is largely supportive of the Government's operation of the system, and that Lord Carlile felt that the process appeared to work. Indeed, he concluded that it was extremely rigorous, and that the Home Secretary took his personal responsibilities extremely seriously. If I may say so without embarrassing the Home Secretary, it is a reflection of his stature that not a single Member of the House will be surprised to learn that he took them seriously.
	That does not mean, of course, that the control order approach can replace proper judicial process, which is why it should be kept under review, minimised and in due course replaced. It is also why, in paragraph 37 of the report, Lord Carlile supports the use of intercept evidence—the Home Secretary referred to this—to bring criminal prosecutions in as many cases as possible. Lord Carlile points out that the Terrorism Bill, which is due to return to the House shortly, will allow us to try, and in due course to convict, terrorists more easily, and to reduce even further the need for control orders. Practical factors such as resources will, in time, also help with surveillance, for example.
	The report tells us that 18 control orders were issued last year, and that only one of them applies to a British citizen. I am glad to observe that that particular control order does not involve tagging or curfew, and that it allows the person in question to continue with his work. During the original debate, we expressed the worry that control orders could be destructive of people's lives.
	Nine of the men in question—they are all men—have been removed from the control order system and detained pending deportation, when and if the Government obtain memorandums of understanding with the relevant Governments. This raises two key questions that are not easy to answer, but which I shall put to the Home Secretary anyway. First, how will the Government deal with any legal challenge to deportations, made under the European convention on human rights, where a memorandum of understanding is achieved? Secondly, although the report does not say so in terms, it makes it clear that it is proving quite difficult to conclude those memorandums with certain countries, which is unsurprising. What do the Government intend to do if it proves impossible to conclude them?
	In paragraphs 71 and 72 of the report, Lord Carlile highlights his concerns, and those of the Joint Committee on Human Rights, at the prospect of control orders being renewed time and again. He says:
	"It would not be acceptable for significant restrictions on liberty to continue for years on end".
	What are the Home Secretary's views on that matter?
	Let me now turn to the wider issue of counter-terrorism legislation, which the Home Secretary referred to in his statement. He said that there is no requirement for primary legislation in Lord Carlile's review, but that is not quite right: paragraph 37 makes it clear that the law should be amended to allow limited use of intercept evidence. However, I accept that that will take some time to get right. I believe that the Government are right to legislate on terrorism in a more deliberate manner. Indeed, I should tell the House—I do not think that I am breaking any confidence in doing so—that the Home Secretary and I have discussed at length the use of intercept evidence. My party did not press the matter in the Lords, on the understanding that the Government would make a serious attempt to devise a robust legal model to allow the safe use of intercept material in court. I am very pleased that the Home Secretary has confirmed that intention to the House today.
	I also welcome the Home Secretary's intention to rationalise terrorism legislation. This is not just a technical issue—Lord Carlile's report refers to confusion in this regard. Much anti-terrorism legislation was necessarily put together in haste and has proved unusable or unnecessary. Other such legislation appears to be being used for purposes beyond the original intention, or is being used far more than was intended. There were some 29,000 uses of the Terrorism Act 2000 last year, for example. So there is great scope for rationalisation, including some pruning of current law, and we will do what we can to facilitate that process on a consensual basis. This is an issue of enormous national interest that involves serious matters such as striking a balance between protecting the security and liberty of the subject, and protecting and preserving our values, so we will be very constructive on it.
	However, let me offer a gentle comment—I will not say a rebuke—to the Home Secretary. He expressed disappointment at what he saw as a lack of consensus on the current legislation. There is a difference between a constructive, consensual approach and a supine acceptance of everything that the Prime Minister chooses to announce. We have defeated the Government on some major issues of principle, but they are just that: major issues of principle. As such, they have aroused the passionate concern of members of all the parties represented in this House, not just mine. That is as it should be, and in my judgment such concern has improved the legislation.
	The result of the positive discussions that the Home Secretary alluded to has been fewer clashes—certainly fewer unnecessary clashes—than would otherwise have occurred. The Bill itself is better and more wide ranging than it would otherwise have been, and the Home Secretary will have key legislation earlier than would otherwise have been the case. After all, the timetable on which he is putting this legislation through was my suggestion, which was supported by the Liberal Democrats. So even though the outcome has not always been to his satisfaction—he is only human, so we cannot expect otherwise—it has in fact been good.
	The issues arising from the proposed legislation—the definition of terrorism, the 28-day detention without trial procedure, the use of intercept evidence—are all vital and we need to get them right. I agree that we need to take a measured and thoughtful approach; that, ideally, we should proceed by way of consensus and not according to an unnecessarily hasty timetable; and that cross-party discussion would be useful. The Home Secretary will not expect me to give him a blank cheque, but I will make sure that my party does all in its power to ensure that the process that he described is effective and thorough and delivers anti-terrorism legislation that attracts the support of all parts of the House and, more importantly, really works to defend the lives and liberties of the British people.

Charles Clarke: I appreciate the right hon. Gentleman's constructive and positive tone. I shall not talk today about the details of the control orders referred to in Lord Carlile's report; we will have a chance to debate them when the renewal order is in place. I should re-emphasise the Government's view that, as the right hon. Gentleman said, proper judicial process—going through courts, and for convictions—is the right way to address these matters wherever possible, rather than using measures such as control orders. He is also right to say that under the legislation currently before Parliament, the number of cases in which there is a prospect of securing a conviction through the courts will increase; I hope that it will have the impact that he describes. For the avoidance of doubt, I should confirm our approach throughout this process: we are introducing a regime that will apply only to a very narrow set of cases—we hope that it will become narrower—in which prosecution through the courts in the normal way cannot work.
	The right hon. Gentleman asked how we will deal with deportation cases in the light of court judgments. I am not going to predict how we will deal with such situations, but we have been able to secure memorandums of understanding with a number of countries, and the Foreign Secretary and I continue actively to discuss with other countries the securing of such memorandums. I hope that the courts will regard those memorandums as serious agreements between sovereign Governments in such circumstances. But of course, the courts will have to judge the nature of the memorandum of understanding with a particular country, and its operation in relation to a particular case. Therefore, I am not going to speculate about how that will be dealt with.
	On intercept, the right hon. Member for Haltemprice and Howden is right to say that hon. Members in his party and others, and many Labour Members, have wanted to explore whether we can do better than is currently the case. I can confirm what I have told him in private, which is that the Government are looking at that very actively and seriously, with a view to seeing how we can introduce an appropriate regime. A report on that will be produced later in the year. If progress is made in that regard, I can confirm that legislative change along the lines suggested by Lord Carlile would be appropriate.
	Whether his remarks amount to a gentle comment or a rebuke, the very cordial and consensual relations that I have had with the right hon. Member for Haltemprice and Howden in discussing some of these matters have not always been evident in debates in the House. I blame my own conduct for that, of course, but he may care to look at his own approach in that regard. [Laughter.] However, I do appreciate his determination to play a constructive role in rationalising the legislation. As he says, it could certainly do with pruning and close examination. In that context, we would need to see whether the current legislation on terrorism in Northern Ireland could be brought within the framework. I repeat that I very much appreciate his constructive approach.
	We are not looking for a blank cheque from the Opposition or any other Member of the House. We will not simply lay a proposal on the table and say, "Take it or leave it." We want a serious debate and a consensual approach to achieving a stable and permanent legislative regime that will tackle properly the appalling challenges that we face.

David Winnick: Does my right hon. Friend accept that, although certain differences arose in November, most hon. Members recognise the heavy responsibility that my right hon. Friend the Home Secretary bears in the face of the ongoing threat of terrorism carried out by murderous fanatics? No one should underestimate the terrorist danger that our country faces. I hope that a consensus will emerge on this matter, and that the Opposition parties will play a positive role, but there needs to be greater dialogue between the Government and Parliament as a whole. If that had happened previously, some of last year's difficulties might have been avoided. However, I have confidence in what my right hon. Friend has said, and that that dialogue will take place.

Charles Clarke: I am very grateful to my hon. Friend for those remarks, given the leading role that he played in the debate last year. I pay tribute to his continued engagement in these matters and his total commitment to fighting terrorism by whatever means are appropriate. I very much agree with him: this is a matter for all of Parliament, both Government and Opposition parties. I mentioned the possibility of pre-legislative scrutiny of proposed legislation because I think that that might offer a vehicle for progress on a consolidated basis. In that way, hon. Members of all parties, whether they have a specific or a more general interest, will be able to make a contribution to creating the new legislation. I confirm that our approach is intended to achieve consensus across the House on these matters.

Alistair Carmichael: May I also thank the Home Secretary for his very generous advance notice of the statement and of Lord Carlile's report? That has been of considerable assistance. I should also like to associate myself with his remarks about the composition of Lord Carlile's report. He has brought to it his customary intellectual rigour and a very sound practical approach to issues that can be complex and involved.
	In respect of control orders, Lord Carlile concludes:
	"In practical terms control orders have been an effective protection for national security."
	That is significant, but he also observes:
	"They fall not very far short of house arrest, and certainly inhibit normal life considerably",
	and
	"As a last resort (only), in my view, the control order system as operated currently in its non-derogating form is a justifiable and proportional safety valve for the proper protection of civil society."
	In the light of that, what action will the Home Secretary take in relation to what Lord Carlile says about the use of deportation detention, as outlined in paragraphs 27 and 28? He states:
	"However, I have a real concern about the detention under deportation procedures (even where bail has been granted) of persons who in practice cannot be deported at present and are unlikely to be capable of legally compliant deportation within a reasonable time."
	That sounds like something dangerously close to an abuse of process.
	Will the Home Secretary also ensure that Lord Carlile's conclusions in respect of letters issued by chief constables will be acted on? He observes:
	"Little is given by way of reasons"
	when chief constables certify that there is
	"no realistic prospect of prosecution."
	Finally, will the Home Secretary act on Lord Carlile's recommendation that there should be established
	"a Home Office led procedure whereby officials and representatives of the control authorities meet regularly to monitor each case, with a view to advising on a continuing basis as to the necessity of the obligations imposed on each controlee"?
	I welcome the Home Secretary's announcement about a new Bill that I hope will receive some pre-legislative scrutiny. I have told him already in private that I consider that to be a sensible way to proceed, although I hope that it will be possible to look again at the indicative timetable that he has proposed, as that would not allow anything to reach the statute book inside two years. Will he assure the House that the new Bill will not be used as an excuse for revisiting matters on which hon. Members have already expressed a very clear view?
	Finally, I share the Home Secretary's frustration at the lack of consensus on these matters. It is clearly preferable to proceed with consensus, if that is at all possible. I fear that the fault is shared by all parties, and I hope that he will ensure that his words are heard in No. 10 Downing street.

Charles Clarke: I thank the hon. Gentleman for his approach and the stance that he has adopted. As I said in my statement, in principle I accept each of Lord Carlile's recommendations to which he referred—on Home Office procedures, deportation processes and so on. I am required—and wish—to consult the Intelligence Services Commissioner and the director general of the Security Service, but I hope that not too many weeks pass before we debate the renewal order. I shall then set out to the House my detailed and final decision, following that consultation, on Lord Carlile's recommendations.
	I very much welcome the constructive approach adopted by the hon. Member for Orkney and Shetland (Mr. Carmichael) in respect of the timetable for the new Bill. I can tell the House that his predecessor in the post took the same approach. I shall look at what the hon. Gentleman said about the indicative timetable, but I am determined that the new Bill takes full account of all the pieces of work to which I referred. The timetable will therefore not be based on indolence on the part of Parliament or the House, but on the fact that proper account must be taken of how the regime has worked, the comments that are made about it, and other specific pieces of work that must be developed.
	The hon. Member for Orkney and Shetland mentioned revisiting issues. Parliament has a tradition of doing that in a variety of ways. I cannot guarantee that no issues will be revisited, by me or another Labour Member. I am not sure that I can ask him for a guarantee that his party will not revisit any issues—I am thinking about its opposition to the existence of control orders in the first place—but a commitment in that regard from him could very much aid consensual progress.

Brian Jenkins: My right hon. Friend said that he would consult the ISC and the director general of the Security Service. I know that these are difficult matters, but will he ask them also to prepare a report for Members of Parliament that could be placed in the Library? In addition, will he ask them to push the envelope in respect of the information that any such report can contain? In these circumstances, the more information that hon. Members have the better, especially when it comes from an independent and neutral source, although I recognise the difficulties that our security services encounter in making such information available.

Charles Clarke: I very much appreciate the way in which my hon. Friend puts his very appropriate question. It is right that we need to share information as much as we can, with Parliament and with society more widely, although my hon. Friend clearly accepts that there are serious constraints on how we do that. There are various procedures that we can follow to make that information available—through the Intelligence and Security Committee, the Joint Committee on Human Rights and the Home Affairs and other Select Committees—but I will ensure that we talk to the security services in general about how we can share the information more widely without threatening the country's security in any direct way. I accept without qualification his fundamental point, which is that our security will be stronger if the information is more widely shared and understood. The question is how best to do it. I can assure the hon. Gentleman that I will set about the task with that in mind.

Andrew MacKay: While warmly welcoming the Home Secretary formally letting the House know today that work is being carried out on a legal model that we hope will allow for tapped evidence to be permissible in court, may I underline the fact that for many of us it is absolutely essential that we fall into line with our European allies and that this actually happens? We fully understand that it might take some time to find this legal model, but it must happen and it must be incorporated in the fresh legislation. I hope that it is a matter of when, not if.

Charles Clarke: I understand the right hon. Gentleman's point and I reaffirm the commitment that I gave in the statement and in response to his right hon. Friend the right hon. Member for Haltemprice and Howden (David Davis) about our intentions in these matters. I should put two points for the consideration of the House. First, our legal systems are very different from the legal systems in other European countries. I notice some characteristic austere nods from his Back-Bench colleagues on that matter. We need to understand those differences, as I am sure the hon. Member for Stone (Mr. Cash) does better than any of us, when we think how to deal with this. I accept what the right hon. Gentleman is saying in principle, but we should accept the reality of how this is dealt with by very different legal systems.
	The second issue that I always have to be aware of is the need to ensure that we do not jeopardise our ability to collect information and intelligence which is important in the national security struggle in which we are engaged. Those are my two qualifications. I again confirm that we are keen to find a solution if we can. We are working actively on this. I look forward to the House, at some point in the timetable that I have set out, considering how well or not we have achieved that.

Clive Betts: May I welcome my right hon. Friend's statement, particularly the idea of consolidated legislation, which seems entirely right and appropriate? I welcome the intention to produce the Bill in draft form for pre-legislative scrutiny. That seems entirely consistent with my right hon. Friend's approach to engage with and listen to the views of right hon. and hon. Members. I am sure that he will be able to give me the assurance that I seek, namely that that scrutiny will be informed by Lord Carlile's thoughts and views about the definition of terrorism. It is the current definition in relation to the glorification clause that has caused many of us real problems with the current Terrorism Bill.

Charles Clarke: First, I am grateful to my hon. Friend for his general support. Secondly, I can certainly give him the assurance that he seeks. The reason why—it was in response to the debate in this House—we have given Lord Carlile this commission is precisely to inform the debate that we will have. We are expecting him to report towards the end of this year. These are difficult questions. Perhaps I should remind the House that the United Nations Security Council decided last year to pass a resolution on this matter, including—dare I say it—the word "glorification" as a matter that should be outlawed. That was according to the august body of world opinion, the UN, and not just some No. 10 Downing street occupant of the moment. One of the mandates from that Security Council resolution was that during this year the convention on terrorism should be developed and a new agreed international definition of terrorism achieved. I discussed that with the UN Secretary-General. There is serious work going on in this area and there are serious difficulties. I am not sanguine about the possibility of getting such an agreement, but obviously I would want us to take account of whatever happens in the UN context. I can happily and confidently give my hon. Friend the assurance that he seeks.

William Cash: May I welcome the Home Secretary's announcement with regard to the prospect of new legislation? I hope that when he refers to consolidation he uses that in the broad sense because it may well need to be a consolidation with amendments. May I suggest to him that the first priority is to protect the public from terrorism and that the question of whether or not we subscribe to the Human Rights Act 1998 is only secondary? Does he agree that the role of the judiciary under that Act sometimes appears to interfere with the first principle, the protection of the public, and that we in this Parliament should legislate on our own terms to guarantee fair trial, habeas corpus and due process for alleged terrorists, but not hand over those important decisions to the court in Strasbourg or, now that the charter of fundamental rights is coming in through the back door, to the court in Luxembourg?

Charles Clarke: I was using the word "consolidation" in a broad sense and perhaps too loosely in my statement. I can confirm that my intention is in accordance with what the hon. Gentleman is saying—that is to look at the situation in the round and get a clear position on the statute book. I cannot agree with his attacks on the European convention on human rights and the Human Rights Act 1998. That has been an important development in many ways. Neither can I accept that the role of the judiciary somehow stands against the protection of the public. The rule of law in this country is dependent on the independence of the judiciary and how it operates in deciding how to protect individual liberties. That being so, there are serious issues about the interpretation of the ECHR and some of the court judgments. We have asked for certain issues to be reconsidered by the court—for example, the Chahal judgment in relation to these matters. We have joined various other actions in those regards. I am not saying that there is nothing in what the hon. Gentleman is saying, but it would be a grave mistake to set the judiciary as the opponent to the protection of the public because that is not true. It would be a grave mistake, too, to say that human rights should not be at the core of our approach. As the hon. Gentleman rightly says, the balancing issues are complicated and difficult and that is precisely what Parliament will have to assess when we look at the legislation.

Jim Cunningham: I echo what my hon. Friend the Member for Tamworth (Mr.   Jenkins) said: what would really reassure the public if and when the new legislation goes through Parliament would be if we could have some sort of annual report. The public would then be reassured that Parliament had taken an interest. Finally, what happened to the proposal in the press report to tap Members' telephones? Does my right hon. Friend agree that there is a question of confidentiality between the public and their Member of Parliament?

Charles Clarke: On my hon. Friend's final point, there are important issues at stake. The Intelligence Services Commissioner has made some recommendations and the Prime Minister is considering them and will make a statement in due course, as he has said. I understand exactly my hon. Friend's points and their importance. There is a whole series of reporting and accountability procedures in the current legislation, such as reports to the House and certain Select Committees and renewal legislation in various forms. I agree with my hon. Friend, first, that reporting procedure is important and needs to be part of this and, secondly, that it needs to be fairly consistent and straightforward to improve public understanding of the issues. When we look at the new legislation, I hope that we will get a clear system of reporting. That would be bound to include an annual report of some kind. The type of scrutiny given to that report is also relevant. It would be beneficial to get a coherent approach on all these reporting and accountability mechanisms.

Julian Lewis: What proportion of people who are giving the Government cause for concern came to this country illegally? Of those, how many would be returned if memoranda of understanding could be reached? What will we do if the courts decide to strike down those memoranda of understanding?

Charles Clarke: I do not have figures on the first question. The hon. Gentleman's third question contradicts his second, by which I mean that the role of the MOU and how it operates and how effective the MOU is in returning people to countries from which they have come depends entirely on the court judgment of the integrity of the MOU process. His two questions are related. I cannot require a court to agree with my decision purely because an MOU is in place. However, in a case that I make to a court, I can point to or conclude an MOU and try to operate in accordance with it. I cannot prejudge how a court will decide to interpret a particular MOU.

Dennis Skinner: Does my right hon. Friend agree that experience shows, certainly over the past few years, that however much co-operation he seeks from the Opposition—even from the Liberal Democrats on a good day—the problem is that the writ does not extend to the House of Lords. On almost every single issue of this kind, that has been a stumbling block. I do not know what my right hon. Friend will do about that, but it is a problem. Finally, the biggest poser is the political question: someone's terrorist is another person's freedom fighter.

Charles Clarke: I entirely agree with my hon. Friend's comments. His point about terrorist or freedom fighter is exactly the issue that the UN is addressing, and it is why some of our hon. Friends pressed the need for a new look at the definition of terrorism in the debates on the legislation last year. It is a difficult problem, because the question for freedom fighters is how their fight for freedom is undertaken and who is brought into the firing line. I accept my hon. Friend's point and it needs to be part of the process.
	On my hon. Friend's first point, he is a far more experienced parliamentarian than I am, but I regret to say that it is not simply a question of what has happened in the other place. In this House, we have seen some sharp exchanges in some debates. I never make political comments about the Lib Dems or the Conservatives—I eschew that pleasure—but I hear what my hon. Friend says and there is much substance to it. All parties would do themselves credit in front of the public if they took the issues seriously, addressed them directly and could not be accused of political point scoring.

Philip Hollobone: Terrorists cannot commit their atrocities unless they are funded to do so. Is the Home Secretary satisfied that the present controls over the international financing of terrorism in this country are strong enough? Does he intend to bring forward further legislation in that area and is he satisfied that we receive sufficient co-operation from the EU in those matters?

Charles Clarke: We have already made legal changes in relation to the financing of terrorism for the reason that the hon. Gentleman expresses. Of course, the question of whether those controls are adequate is something that we can address if new legislation is required. My right hon. Friend the Chancellor and I have worked closely together to try to achieve a regime that attacks the funding sources of terrorism. I am satisfied with the co-operation of the European Union on this matter. Indeed, one of the acts during the British presidency of the EU was a resolution at the Justice and Home Affairs Council just before Christmas, which was brokered and led by Britain, to reach agreement on several measures to counter terrorism, including measures on terrorist financing of the type that the hon. Gentleman describes. Of course, the question of turning all the intentions—the law, the action plans, the declarations—into a tight working relationship is always an area where more work needs to be done, and we are focusing very much on that.

Tobias Ellwood: I am pleased that the word "pruning" was mentioned in regard to this statement, because while we need robust legislation on terrorism, it is possible to build the walls too high and over-legislate, which affects our civil liberties and our daily lives so that the terrorist wins long after the bomb has gone off. I welcome the fact that we will be able to review the legislation.
	In comparison to the victims of the 7/7 bombings, who received good compensation, the Britons who were affected by the bombings in Egypt—carried out by the same terrorist group—received no financial support. Would the Home Secretary advise the House on the Government's intentions on that point and will it be addressed in the new legislation?

Charles Clarke: Measures on compensation could be included in such legislation if that is what the House wishes. I know of the hon. Gentleman's own family losses to terrorism in relation to certain events. It is difficult to decide how far the international obligations run and what the relationship is between a compensation scheme, such as the criminal injuries compensation scheme, and the insurance principle. There has been much discussion in Government about that matter to see how we could make progress and we will set out any proposals that we have in due course. I do not think, however, that there is a simple equity between somebody who loses their life on the London underground and someone who loses their life in a terrorist atrocity in some other country, whether it be in Sharm el-Sheikh or Bali. It is a difficult issue.
	On the overall approach, legislation certainly benefits from being clear, and that is one of the arguments for a codification, which would at least lead to a reduction in the quantity of words and—I hope—a gain in the clarity of the legal intent.

Points of Order

Michael Fabricant: On a point of order, Mr. Deputy Speaker. I fear that I may have inadvertently misled the House on Monday. In Church Commissioners questions, I mentioned the funding of cathedrals and the fact that they are not funded by the state. I said:
	"At Lichfield cathedral, the charge is voluntary, although the majority of visitors pay the recommended amount."—[Official Report, 30 January 2006; Vol. 442, c. 14.]
	I have now received a letter from the Venerable Chris   Liley, the Archdeacon of Lichfield, saying that unfortunately that is not the case. Although the suggested payment is £4, the amount contributed by visitors is only 80p and is given by a little under half of those who come in. It would seem that people are loth to give donations, even when voluntary—

Mr. Deputy Speaker: Order. I would be grateful if the hon. Gentleman could tell me what the point of order is for the Chair.

Michael Fabricant: My point of order is that I wish to set the record straight. I did not wish to mislead the House and I hope that you agree, Mr. Deputy Speaker, that the people who visit Lichfield cathedral appear to be rather mean.

Mr. Deputy Speaker: It certainly is not for the Deputy Speaker to agree with the hon. Gentleman on such matters, but he has now put the record straight from his point of view.

Peter Bone: On a point of order, Mr. Deputy Speaker. I seek some further advice on an important matter for my constituents. Both the Prime Minister and the Secretary of State for Health have stated that the maximum waiting time for NHS in-patient treatment is six months. My local hospital has just announced the cancellation of 579 operations and 2,849 out-patient appointments and has confirmed that in-patients will not be treated within six months. I tried, through parliamentary questions and letters, to clarify the situation. Can you give me any further advice?

Mr. Deputy Speaker: That is not a matter directly for the Chair. The hon. Gentleman must persist through the normal channels available to Members of Parliament. My suggestion would be that he apply for an Adjournment debate and make his point to the appropriate Minister in that way.

Defence Procurement

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Watts.]

Adam Ingram: As Minister for the armed forces I have the privilege of working with and meeting our servicemen and women on a day-to-day basis and know that they are the finest in the world. The nation is fortunate to have them. In an uncertain and difficult environment, they stand ready to respond to any challenge, whether in support of operations in Iraq, Afghanistan, the Balkans or elsewhere, or assisting in civil disaster relief, such as in the aftermath of the Pakistan earthquake or the 2004 Boxing day tsunami.
	As the House will be aware, following the recent deaths of Lance Corporal Allan Douglas from the 1st Battalion the Highlanders and Corporal Gordon Pritchard from the Royal Scots Dragoon Guards, 100 British personnel in Iraq have now lost their lives, 77 of them as a direct result of hostile action. Our thoughts go to their families, friends and loved ones at this difficult time.
	As well as those who have tragically lost their lives, we should not forget those who have been injured. As my right hon. Friend the Secretary of State for Defence made clear on his visit to injured service personnel, some 230 UK personnel have been treated at UK medical facilities in theatre for wounds as a result of hostile action between March 2003 and December 2005. Over the same period, some 40 UK service personnel have been categorised as "very seriously injured" as a result of injury in Iraq, whatever the cause, meaning that their life was imminently endangered. Between February 2003 and December 2005, about 4,000 military and civilian personnel were medically evacuated from theatre, the majority of whom were not casualties of hostile action. Given the focus on that issue, I assure the House that the Ministry of Defence is taking steps to ensure the accuracy of our information on casualties, which we will publish in the next few weeks.
	Our care for our personnel is world-class and it will continue to be so. I know that the whole House will join me in paying tribute to the men and women of the armed forces in Iraq and elsewhere who have done, and continue to do, a tremendous job serving their country.
	Despite those tragedies, we cannot let ourselves be distracted from the job to be done in Iraq, where we are acting to assist the Iraqi people and their elected representatives. We must honour our commitment to the Iraqis and we will leave once our job in Iraq is done—once the conditions for the handover of security to the Iraqis have been met and we, the Iraqi Government and our coalition partners are confident that the Iraqi security forces can operate without our support.
	The UK also remains committed to the emergence of  a prosperous, democratic, secure and stable Afghanistan. We have already transformed the country from a pariah state that harboured international terrorists into a functioning democracy. For the first time in 36 years Afghanistan has both a democratically elected President and Parliament.
	Life for ordinary Afghan people has changed and is continuing to change for the better. More than 6 million children are back in education, a third of them girls, and many thousands of children have been immunised against serious diseases. We are seeing the staged progression and development of the ISAF—international security assistance force—mission across the whole of Afghanistan.
	The south is a less benign and more complex environment, where insurgents, the drugs trade and corruption pose a greater threat to security—

Mr. Deputy Speaker: Order. I take it that these are the Minister's preliminary remarks. Today's debate is specifically about procurement.

Adam Ingram: Very much so, Mr. Deputy Speaker. But we have to have set our procurement strategy against the environment and theatres in which our people operate. I was setting the scene, but I shall come on to the specific issue.

Ben Wallace: On a point of order, Mr. Deputy Speaker. You alluded to the subject of the Minister's opening remarks, so I am looking for your guidance. The Minister opened his remarks with casualty figures that have until now been unavailable to many of us who have tabled parliamentary questions about the actions in Iraq and Afghanistan. Is it in order for the Minister to release the figures in a debate on procurement?

Mr. Deputy Speaker: The Minister's remarks are a matter for him, but I repeat what I just said to him: this is not a general debate about Iraq or Afghanistan, but is specifically about procurement and it would be helpful to the whole House if he confined his remarks from now on to procurement.

Adam Ingram: Of course I will, Mr. Deputy Speaker. At all times I try to keep within the rules of the House. The hon. Member for Lancaster and Wyre (Mr. Wallace) is wholly wrong, however. The figures have been made available; indeed, I understand that parliamentary questions have been answered today. I suggest that he read the Order Paper to keep abreast of current developments. The information I gave was given previously, but I thought it important that we also recorded it here—

Mr. Deputy Speaker: Order. I am sure that the Minister's response is a genuine response to the point of order, but it simply exhibits the problem that arises if we widen the debate too much. Again, I remind the Minister and the whole House that today's debate is about procurement.

Adam Ingram: I accept all that, Mr. Deputy Speaker. I was of course coming to the conclusion of the context in which our people operate and I then intended to talk about the need to ensure that we have battle-winning equipment to ensure their success.
	I was explaining that the environment into which our troops are going in the south of Afghanistan is less benign and more complex, where insurgents, the drugs trade and corruption pose a greater threat to security. That is why we have committed to move to the south. By deploying there, we hope to create an environment where the Afghan Government can operate freely and securely to bring about the progress we have already seen elsewhere. The international conference held this week in London resulted in a renewed international commitment to Afghanistan and will make a major contribution to its rebuilding.
	Our forces' proven ability to act as a force for good in the world—in Iraq, Afghanistan or elsewhere—is testament to them and the equipment they use. Contrary to some opinions, the armed forces are provided with world-class equipment to support them in their tasks. As a result of the Government's sustained investment, about £5 billion a year is spent on new equipment, with £6 billion being spent across the entire equipment plan, and that will continue to be the case. In doing so, we are supported by a strong and innovative national defence industrial base. We need to ensure that our armed forces continue to have such support so that they have the equipment they require, on time and at best value for money for the taxpayer.

Peter Bone: Will the Minister give way?

Adam Ingram: I want to make some progress. I have hardly started to talk about procurement yet and I am sure that the hon. Gentleman has some points to make about that. I have not yet mentioned any particular procurement streams, but if he is intervening on the general context in which our people operate I am prepared to give way.

Peter Bone: I am grateful to the Minister. From a reply to a written question on a general point, a Member can establish the cost of a piece of equipment, but I cannot get from the Minister the estimated costs of the Eurofighter, for example. How does that general point tie in with what he was saying?

Adam Ingram: We would need to look at the particular question. We constantly answer a range of questions. If I remember correctly, we said that some of the issues are held in commercial confidence, for very good reasons—we could enter the next phase of negotiations for tranche 3. I do not know how sophisticated the hon. Gentleman's understanding of procurement processes is, but he must know that we have to try to retain matters that are important to us as we negotiate to get best value for the taxpayer. Perhaps he would write to me if he thinks that we are not giving him best information—I do not know for what purpose, although I hope it is not to undermine what we are trying to do to get best value for the taxpayer—and I shall see what additional information I can give him.

Michael Jack: In reply to my hon. Friend the Member for Wellingborough (Mr. Bone), the Minister used the word "could" in the context of the negotiations on tranche 3 of Eurofighter Typhoon. Is it still "could" or is it "will" enter? Will he clarify his language on that point?

Adam Ingram: The right hon. Gentleman probably means would I tell him rather than could I tell him. As he knows, we are committed to tranche 3, and the negotiations will not proceed until 2007, or slightly before that. I used that phrase because things can change; but that is not what we are planning, and we are still intent on continuing the process.
	I was saying that we need to ensure that our armed forces have the equipment that they require on time and at best value for money for the taxpayer. That is why, in December 2005, the Government published the defence industrial strategy, which had that requirement as its principal aim.

David Taylor: Is the Minister convinced that the privatisation agenda, which could lead to the loss of 20,000 MOD jobs, will not adversely affect the MOD's ability to be an intelligent customer and to acquire good-quality equipment at best prices in an immensely complex sector? Is he concerned that under the policy of collocation jobs will be lost in deprived areas such as south Wales, the west midlands and Cumbria, only to be transferred to prosperous areas where recruitment and retention are difficult, such as Abbey Wood, Bath and High Wycombe?

Adam Ingram: I do not recognise the premise of the question. We are seeking not to privatise but to drive through very significant efficiencies. We have said repeatedly from the Dispatch Box that we are committed to achieving £2.8 billion, or thereabouts, in efficiencies over the next three years. We must therefore consider how we deliver our services—sometimes in partnership with industry and, sometimes, in-house, but at all times trying to maximise the efficiency of operation.
	My hon. Friend the Member for North-West Leicestershire (David Taylor) mentions collocation. If he is arguing that we should keep two departments separate from each other, when we can make significant efficiencies in back-office staff by collocating, thereby releasing money for the front line, I could not disagree more.

David Taylor: indicated dissent.

Adam Ingram: We must ensure that all those who support the front line do their jobs as efficiently and effectively as they can. By driving through that agenda, we are ensuring—this is where I shall come to the procurement aspect, Mr. Deputy Speaker—that we will be able to sustain the major procurement programme.
	I hear language that is part of a major campaign, but I suggest that my hon. Friend may want to ask one or two of the unions that are organising the campaign whether they have ever passed a resolution at their conferences calling for more money for defence—I suspect not—and if they want a growing defence base, they should join those of us who think that that is essential.

David Wright: My right hon. Friend will be aware that staff at Sapphire House in Telford do an excellent procurement job. They have made a constructive alternative proposal to collocation, known as the straw man paper. Will he commit himself to taking another detailed look at that proposal before he makes any decision about the future of Sapphire House?

Adam Ingram: My hon. Friend has been very active in respect of that and other decisions that might be deemed difficult that have landed on his area of the country and his constituency in particular. He will know that I am only too willing to meet the trade unions and local representatives, as well as him, to listen to the arguments and to put what we are doing under test. One of the projects that I inherited is a very good example, although people seem to have forgotten about it. The airfield support project was an amalgamation of a new, bigger review with what was originally defined as "Fire Study 2000". We spent a long time examining our airfield support. Ultimately, when it became clear that the private finance initiative proposal would not produce results, we abandoned that approach.
	I give that example to show that, at all times, we put such things under intense scrutiny. My hon. Friend the Member for North-West Leicestershire mentioned the intelligent customer in the original question. We must test all our current projects by determining whether we would create a gap or a potential problem for ourselves in the future. If we cannot satisfy that test, we should not proceed. We undertake that examination at all times.
	I think that the straw man paper has been withdrawn, but I will write to my hon. Friend the Member for Telford (David Wright), who has been very assiduous in pursuing the issue.

Mark Pritchard: Does the Minister agree that it is absolutely wrong, at ministerial or official level, that a lease should be signed on a building in Bristol before the end of the consultation period after which people might be moved from Telford to Bristol? Is he aware that the Comptroller and Auditor General has been asked to investigate? How can the consultation process be open and transparent for Defence Logistics Organisation workers in Telford when the deal has been signed already down in Bristol?

Adam Ingram: I ask the hon. Gentleman to calm down a bit. Knowing that a work stream is being undertaken that could result in the collocation of two major headquarters, we have considered whether we can benefit by procuring at this stage in the market. We have made the decision to take up that office space. Of course, if the collocation does not proceed, we will release that space back to the market. If we wait or do otherwise, the office space to meet our needs might not be available. The correct management and ministerial decision was taken to give us the opportunity of ensuring that we are in the best position. If that proves not to be the right decision, our judgment is that we will not suffer a loss. Indeed, we might well make a profit, but that is not what drives us. We are trying to get the best balance. We have not reached a conclusion on the consultation—far from it—and we hold rigidly to that position.
	I suggest that the hon. Gentleman read the paper on which he campaigned at the last election—the James report—with all its initiatives to dispose of real estate, other assets and many of the existing working structures, without any attempt even to examine the territory. It simply said, "Let's privatise this; let's dispose of that; let's get rid of this." He campaigned on that in the last election; he is now asking me to be very careful with his constituency, saying "Do it to others, not to me." That is the principle that he applies.
	I want to make some progress and to talk about the defence industrial strategy. The rationale for publishing the DIS is clear. Since the strategic defence review was undertaken, the environment has changed considerably. This nation no longer faces the dangerous but relatively predictable threat posed during the cold war. The threat now, however, is no less dangerous: those involved can strike at any time and they fight unconventionally.
	The way in which our armed forces have taken on the new challenge presented by the war on global terrorism is testament to their proven adaptability and flexibility. Equally, we must ensure that the equipment capability requirements of the armed forces can be met now and in the future. We need to identify the core skills and industrial capabilities that are required onshore to sustain the armed forces' ability to operate with an appropriate level of sovereignty—indeed, we have done so with the DIS.
	The DIS provides industry with the certainty to plan ahead and invest for the long term. We want to attract skilled and enthusiastic people to the industry. As a result, we intend to work with the industry on how we do that and on schemes to develop our people. The DIS involves a studied assessment of each individual industrial sector. Where our requirements have been set, they are measured against our procurement activity, and where there are mismatches they are set against the sustainment work required.
	In certain sectors, industry has to move now, to ensure that the industrial base is appropriately structured for the future. Now is the right time to do that, while many of our companies are busy delivering the series of new platforms that the Government are procuring. Whatever the rate of new production, we need to ensure that the technologies that give our equipment its cutting edge, which are often provided by smaller enterprises in the supply chain, are nurtured and developed.
	The discipline of systems engineering will continue to be vital in seamlessly integrating new technology to our current infrastructure. The outcome of all that will be that, for the first time, industry will have a much clearer idea of our priorities, enabling both industry and investors to plan for the future in confidence.
	At present, we are in the middle of a substantial investment programme in new equipment for the armed forces: not least, with the components of carrier strike, the CVF—carrier vessel future—and the joint combat aircraft, Astute attack submarines, the A400M transport aircraft, Typhoon and complex weapons, such as Storm Shadow, and forecast spending of more than £2 billion a year over the next decade on our drive towards network enabled capability.
	Yesterday, HMS Daring, the first-in-class of our Type 45 destroyer fleet, was launched. I regret that I was unable to attend, but my right hon. Friend the Secretary of State for Defence was there and it was a fantastic experience, not just for those who had helped to plan and build the ship, but for the tens of thousands of people in Glasgow who watched that unique dynamic launch. It was inspiring and it sends the right message to taxpayers about what they are getting for their money.
	Daring's launch was a great advertisement for the skills and commitment of the thousands of people involved in the programme. It will be the most powerful destroyer that the UK has ever built and all those involved in the programme can be extremely proud of what has been achieved. Daring's on-board living standards, which have generated much positive press interest, also help to demonstrate the priority that we are giving to improving the quality of life of members of our armed forces. The equipment will take the armed forces into the 21st century with the kit that is needed to meet a varied and dangerous threat with certainty.

Julian Lewis: I also had the great privilege of attending the launch yesterday and am grateful to BAE Systems for making that possible. I entirely endorse everything that the Minister said about the great efforts of the work force and design team, and I am sure that none of us will ever forget yesterday's experience. Bearing in mind the fact that we are now operating with a fleet with considerably fewer frigates and destroyers than the strategic defence review predicted would be necessary in 1998, even though our commitments have increased, is the Minister in a position to let the House know what the final total of Type 45 destroyers to be constructed will be?

Adam Ingram: I am sure that the hon. Gentleman had a good day in Glasgow yesterday—I just wish that I had been there to see it. He is always welcome to go back to Glasgow and I am sure that he will be well received by the people of that great city.
	The original plan was for 12 vessels in the class. After the re-examination of our needs and the budget, the number was recalculated as eight. We have ordered six, but the Secretary of State has said that he would like to see eight. The hon. Gentleman will know that we will have to consider appropriately the possible benefits in the future to ensure that we can get the best price, but we are not at that stage at the moment because we do not have the sums in the defence budget. We need to address the priorities in all the other areas.
	I remind the hon. Gentleman that we are spending £6 billion through the equipment plan. That considerable sum must be shared among all our needs for land, air and sea. Scrutiny and examination of the situation will continue. The chiefs themselves—the military planners—will have to consider the capabilities that each service requires and make their case, taking account of the known priorities. There must be balance across the breadth of defence. The equation is not new; it has probably been there since time immemorial and will continue for decades, if not centuries, to come.

Edward Vaizey: I echo the comments of the Minister and my hon. Friend the Member for New Forest, East (Dr. Lewis) about the Type 45 destroyer, with which the Navy is absolutely delighted. We are also delighted, especially because it fills the Americans with a huge amount of envy. Will the Minister take his remarks further because although the Royal Navy is delighted with the destroyer, it is aware that a balance must be struck between capability and presence? For example, I understand that we have only one ship in the Atlantic, with its duties divided between the Caribbean and the Falklands, whereas we used to have two. I know that it is extremely difficult to resolve the equation, but would be interested to hear the Minister's further remarks.

Adam Ingram: Such tasking has been in place for a considerable number of years and seems to work extremely well. I had the privilege of visiting HMS   Richmond a year and a bit ago when it was on the   allied patrol task (north) deployment. It did a tremendous job when it was involved in the post-hurricane relief effort and also contributed to our counter-narcotics activities in the area. HMS Cumberland has just come back from the deployment and it carried out tremendous work, too. The evidence shows that successful missions are being carried out. We must strike a balance by targeting where we can give best effect. Clearly, the Navy would like to have more boats, but the Army and Air Force would like to have more of other things, too, so the priorities must be balanced. The Conservative party had to balance priorities when it was in government. I will not make the political point about the legacy problems from which we are suffering due to overrun, costs and projects running well behind time. Those problems are still creating huge difficulties for present-day and even future procurement programmes. When the hon. Gentleman makes points of criticism—

Edward Vaizey: It was not a critical point.

Adam Ingram: The hon. Gentleman may not want to go there, but we must bear in mind the situation that is being imposed on the present-day Government because of the decisions—poor decisions in some cases—taken by Governments past.
	The Government are overseeing a substantial modernisation of our armed forces' equipment, which is supported by the longest period of sustained real growth in defence spending for more than 20 years. I believe that there can be a tendency to put too much focus on the shortcomings of legacy programmes to the detriment of the many successes that we have achieved. For example, we had the early delivery of the strategic sealift service some 20 months ahead of its target date. The mobile artillery monitoring battlefield radar was delivered six months early. The C-17 was in service three months early and only a year after selection, and the successor identification friend or foe project is five months ahead of schedule. Those are just some examples of the successes.
	With industry, we need to ensure that all our equipment continues to remain cutting-edge throughout what are likely to be very long service lives. For example, the Tornado GR4 upgrade programme that was completed in 2003 and the introduction of Harrier GR9 in September this year will ensure that the capability and combat effectiveness of both those platforms will be maintained for many years to come. Furthermore, we expect Typhoon, which is now coming into service as the bedrock of the RAF's military capability, to be in service well into the 2030s and perhaps beyond.
	That demands a different approach from both the Ministry of Defence and industry. The approach must shift from the up-front procurement of new generations of platforms and equipment to the ability to support them throughout their lives, which is known as through-life capability management. We require industry to be able to upgrade our equipment with new technologies and capabilities, often rapidly, in response to either operational demand, or the emergence of potentially disruptive technology. While this will need, in some cases, industrial restructuring and rationalisation, it actually represents a significant long-term business opportunity for industry and establishes careers for the highly skilled people on whom industry relies for delivery. It will also require, where we develop long-term relationships with industry, continued innovation and the use of a range of commercial tools to secure value for money.

John Smith: Does my right hon. Friend share my worry that the three platforms to which he referred, which will play such an important role in our future defence capability, will all be supported by a single monopoly supplier—one company? Does that raise any concerns with him when he thinks about the future needs of British defence?

Adam Ingram: It does not raise concerns, but shows that we need to think about what we are doing, which is the whole purpose of the defence industrial strategy. My hon. Friend has got it wrong. The company to which he refers is already the monopoly prime supplier and the design authority. It has now moved its people on to the main operating bases so that they can work alongside RAF personnel with greater synergy so that we can turn round the aircraft as effectively as possible. Importantly, we retain the key skills of the design authority company so that we ensure that we have the capacity to maintain the through-life of aircraft.
	My hon. Friend and I have tussled over this time and again. I have no doubt in my mind about the validity of the decision that has been taken because it was based on evidence, whether for fast jet or helicopter support systems. We have not taken a one-size-fits-all approach. In one case we have gone on to a main operating base, but in the case of Defence Aviation Repair Agency Fleetlands, we have moved towards a civilian base on which military personnel work. We must balance the best way in which we can get value for money for the taxpayer and, more importantly, the way in which we can get the best guarantee that the greatest number of aircraft is available at any one time. The evidence already shows that that is happening.

Philip Hollobone: rose—

Adam Ingram: I will move on, if the hon. Gentleman does not mind.
	I want to turn to the maritime sector. We are undertaking the largest naval shipbuilding programme for two generations. Both the Astute submarine and Type 45 destroyer programmes are in their manufacturing phase and we announced details last year of the industrial alliance to take forward the future carrier programme, which will deliver a step change in the power projection capability of our forces. The two new future carriers will be the two biggest warships ever to be built in the United Kingdom, and the associated work could sustain and create some 10,000 jobs across the UK during its design and manufacture period. We also announced last week our intention to work with the French Government on the demonstration phase of that project. That makes clear sense, as it allows both countries to benefit from savings on shared procurements without slowing the tempo of the project. France, as we know, will make a financial contribution to share in the investment that we have made. We have significant investment planned to develop the Royal Fleet Auxiliary as part of the military afloat reach and sustainability—MARS—programme.
	New warship platforms such as HMS Daring are important, but we must be able to support them as part of our overall capability to deploy worldwide. MARS vessels will make a significant contribution to providing sea-based support for amphibious, land and air forces. While that shipbuilding capacity gives us an opportunity to invest in important skills and capabilities, there will be reduced demand in future. We therefore need to plan now with industry to ensure that the right capabilities are invested in, developed and sustained in times of reduced capacity. The maritime industry is fragmented, with high overheads and a skills base that is spread across too many different companies. The DIS analysis has challenged our previous policy, which required all warship hulls to be built onshore, the rationale being better to manage a consistent "drum beat" of shipbuilding for industry to sustain critical capabilities.
	The analysis focused on what those capabilities actually are. In that context, "hulls" is too simplistic a term. We need to sustain high-end skills to design and integrate complex warships and maintain them through-life. We need to retain, too, the ability to design, manufacture and support all aspects of submarine capability. We will develop that work with industry through a maritime industrial strategy team. Our priority is to develop a stable and healthy programme to build complex warships—the "drum beat" to which I referred. It should maintain the critical capabilities, whatever the capacity of industry.
	Regarding submarines, we are working to control cost growth and to identify opportunities for rationalisation in the various onshore monopolies. Submarines are a core capability for retention, but the industry is made up of a series of monopoly suppliers. With only one customer, the need to control costs in the supply chain is paramount. We are addressing that by developing a consistent work load for the sector to help industry to sustain capability and drive down costs. We are looking at new ways of doing business for surface ship support, where a longer-term relationship with industry is more likely to safeguard capabilities at value for the taxpayer. The result of that strategy will provide workers with the security to develop their skills in long-term structured and secure employment.
	Turning to land systems, the armoured fighting vehicle industry provides our land forces with significant military capability. We are currently developing our plans to deliver the complex system that will make up a new family of medium-weight vehicles known as the future rapid effect system—FRES. At the same time, we need to plan ahead for the support arrangements of our existing fleet of some 5,000 vehicles, which will remain in-service for some years. That is why we announced alongside the DIS last year our plans to partner BAE Systems, which supplies 95 per cent. of our existing AFV fleet, better to manage fleet support.

Kevan Jones: I support the progress on land systems, but is there any scope to partner the Swedish Government, who are developing SEP as their equivalent to FRES? Could we try to work with the Swedes, who are collaborating with BAE Systems, to secure a joint venture?

Adam Ingram: The DIS is innovative, so it must look at new ways of working. However, it must also retain core capabilities in this country. BAE Systems is good at identifying market opportunities, but no doubt we will hear more about the matter that my hon. Friend has raised. We need that equipment, however, and we must look at how best we can secure it.

Edward Vaizey: Will the Minister give way?

Adam Ingram: I should like to make some progress, and I have already given way to the hon. Gentleman.
	The partnering arrangement signals our long-term commitment to industry in this sector. It envisages a different way of doing business, as BAE Systems will be contracted to provide AFV capability when and where we need it. It provides for retained access to innovative subsystems and technologies in the supply chain. That will require effort on both sides, but the benefit is mutual, as it safeguards critical capability and at the same time achieves better value for money.
	It is an exciting time for the aerospace industry, with the development of two highly capable aircraft—Typhoon and the joint combat aircraft. Looking further ahead, we will develop potentially transformational uninhabited combat aerial vehicle—UCAV—technology.

Brian Jenkins: I am listening with great interest to my right hon. Friend, who is setting out strategy for the defence industry, but I am concerned about the restructuring of the industry. Who will undertake that restructuring—the Ministry of Defence or industry itself? Will we ask firms to fall on their sword because they are longer needed? How can we guarantee that the best remain rather than undertaking different work such as offshore platforms? Who will drive the restructuring forward over the next 10 years?

Adam Ingram: The principle of the DIS is to find out what our needs are. Industry requires that assessment if it is to plan for the future retention and growth of skills, the recruitment of new personnel, and investment in new technology and plant. It can no longer do so with hunger and burst, which has not served it to best effect or advantage. We now have a framework on which we can build. As for the question of who will restructure industry, the answer is industry itself. If it wants the opportunity for which it has been asking—and we are delivering that opportunity—it must face up to reality and restructure. If it thinks that something is no longer coming downstream, it should ask itself why it should invest in it. If it thinks that something is a major opportunity, it should invest in it, because it is certain that it will happen. There is no guarantee of success, but if restructuring does not take place we will certainly not achieve success, and we would have to continue, as we have in the past, with hunger and burst, which would mean that industries would operate under threat of closure. Restructuring for best advantage is better than the pattern of closure that we have had in past decades, and the strategy gives us the best opportunity to achieve that.
	As for the platforms themselves, Typhoon is a multi-role platform that will take over roles currently filled by the Tornado F3 and Jaguar aircraft. It will be supplemented by the arrival of the joint combat aircraft to succeed the Harrier and Sea Harrier and perform a variety of multi-role operations. We want to retain and develop engineering and design capability to ensure that Typhoon and the JCA are supported, operated and upgraded throughout their service life. That means harnessing and inserting new technologies, so that the aircraft remain leading-edge while investigating the military potential of UCAVs.
	The industry must adapt to meet that change in emphasis from the design and build of new aircraft to supporting them through-life. BAE Systems, Rolls-Royce and Selex, among others, will play a critical role, and there are significant business opportunities available in the long-term support of our future aircraft. We will work with industry throughout the year on the business rationalisation and transformation needed to sustain the skills and capabilities that we require in a cost-effective manner.
	As for rotary wing, the helicopter sector shares many of the characteristics of the AFV industry, and we would wish to retain the abilities to maintain and upgrade our existing helicopter fleet with a large onshore supplier. To that end, we are developing a partnering arrangement with AgustaWestland, whose Future Lynx product remains our preferred solution to meet a variety of our future helicopter capability requirements. The outcome of that work will sustain the necessary systems engineering capabilities. We need to indicate the way forward on developing efficient support solutions for our existing fleet. Most importantly, that work will provide the Armed Forces with the military capabilities that they require. We expect to finalise the partnering arrangement with AgustaWestland this spring. We will, however, continue to look to the vibrant and competitive global market to satisfy our future requirements.

Tobias Ellwood: The Minister has glossed over one of the most important aspects of the procurement debate, which we should discuss—the F35. Has he had any discussions with Henry Hyde, the Congressman—[Laughter.] Hon. Gentlemen may laugh, but it is a serious matter—he is the chairman in charge of organising the relationship between Britain and America. We are close to losing the deal, which means we will have two aircraft carriers without any aeroplanes on them, unless we get a deal giving us the technology to repair and maintain those aircraft.

Adam Ingram: In a sense, that view is shared across the House. The hon. Gentleman asked whether I had met Congressman Hyde. I have not. The last time I went through Washington he was not available, but I met other key players. Meetings such as the hon. Gentleman suggests are the role of the Minister for Defence Procurement and of my right hon. Friend the Secretary of State. All hon. Members who pass through Washington should be briefed on the issue and should raise it. If they do not, they are not doing this country justice. We must make clear to our American friends and allies the importance of the issue, and we continue to do so. We are making some progress, and I will comment on it later.

Lindsay Hoyle: My right hon. Friend rightly mentioned fast jets and heavy lift capability, but will he describe the benefit of the A400M and how many jobs that could bring to Rolls-Royce, BAE Systems and the rest of the supply chain?

Adam Ingram: That is an important aircraft, which is taking a long time to arrive. That is the reason for the C-17s. Given that the A400M will be leading edge and will have very good technologies on board, it will be able to do a great deal of strategic airlift and strategic activity, which will make it a forerunner in its field. That is why we are excited about the project and waiting for it to be delivered. I hope to be at the Dispatch Box when that happens.

Mark Hendrick: How confident is my right hon. Friend that a stronger version of the JSF will be developed? If that version is not developed, is a carrier version of the Eurofighter being considered? [Interruption.]

Adam Ingram: I hear that described as plan B. As I have said before, we do not plan for failure. We plan for success and put all our efforts into achieving it. What we are planning is the best aircraft of its type, for various technical reasons. The question of marinising Typhoon has been mooted. People are talking about it, but we are not planning that. There are technical issues concerning the stress on such an aircraft landing in the way that it would land. There are major technical issues involved, so hon. Members should not just read the headline and think there is a simple solution. [Interruption] I said earlier that I hope I am at the Dispatch Box when the A400M arrives. With the length of time I am taking, I may well be.

Gavin Strang: The House is grateful to my right hon. Friend for what he has said. The issue is hugely important, as he understands, and a decision will have to be taken. Is not this the year that it will have to be taken? Either we go down the road that I assume is still the Government's preferred option—my right hon. Friend might describe it as plan A—the JSF, using the big new carriers, or we recognise that it must be the Eurofighter tranche 3, navalised, as plan A.

Adam Ingram: I thought I had answered the question, but let me try again. We are confident that we will succeed in what we have set out to achieve. That must be the main thrust of our argument and we must impress it upon our US allies. We are the main contributor to the project—a level 1 contributor, up to $2 billion. That is a significant commitment. We think we will succeed. We are determined to succeed. Beginning to debate alternatives only allows others in the US to say that we are not really interested. The project remains our preferred option and we are confident that we can achieve it.

Robert Walter: rose—

Adam Ingram: I have taken a substantial number of questions on that topic, and there are others that I want to address.
	Within the complex weapons sector we have invested considerably over the past decade in new programmes such as StormShadow and Brimstone. These weapons provide the armed forces with the ability to deliver precise effects, which are able to achieve military advantage at a reduced level of usage. Our analysis has consequently highlighted a series of vital capabilities for retention in this field, with particular emphasis on the design of new weapons and upgrades, integrating them into the wider military network and support through life. But we need to be realistic. Our recent investment cannot continue, and on current assumptions will decrease by 40 per cent. over the next five years, creating overcapacity and a need for rationalisation.
	We will work with all elements of the onshore industry, including overseas companies that have established a UK presence in the sector, on how best to tackle that. This may require us to temper international competition in the short term and to consider whether there are solutions that we might develop with our allies to maintain critical skills. We intend to work on the necessary solutions this year and to implement them in 2007. That will not be easy, but it is essential that we do so in this critical field.
	We also need to ensure that our armed forces can have continued and long-term assured access to less complex munitions, while maintaining the option to go for the best in the wider global market, where security considerations permit. Currently 80 per cent. of our existing munitions requirements are met by BAE Systems via an agreement that commits us to find ways more to effectively provide munitions across the supply base. At present we are engaged with the company to enhance this agreement through a new long-term planning agreement. This will mean changes, but we are confident that we can ensure security of supply.
	I make it clear that we will continue to operate the most open defence market in the world, encouraging others to follow our example. As an example of this, we have recently developed with the European Defence Agency a code of conduct regarding the procurement of warlike goods. We expect this to lead to a more open European defence equipment market, giving UK industry a greater chance to win business abroad.
	The UK industry has also been successful in developing its presence in the sizeable US market and is a major contributor of equipment to the American Department of Defense. UK defence sales to the US have increased by about £500 million to a total of nearly £1.5 billion over the past five years. Over the same period, there has been a corresponding increase in the UK's share of total US defence investment spending from about 1.5 per cent. to 2 per cent.. The UK accounts for about 50 per cent. of total US defence procurement spending overseas.
	Despite our close industrial, political and military ties, however, we continue to experience difficulties in securing the necessary technology transfer from the US to guarantee our sovereign operational independence. Such technology transfer is vital if we are to continue to co-operate with the US on major equipment programmes. As the hon. Member for Bournemouth, East (Mr. Ellwood) suggested in his question, this is an important issue for us and one that we continue to raise at the very highest levels.

Philip Hollobone: Will the right hon. Gentleman give way?

Adam Ingram: No, I must make progress.
	The defence industrial strategy also makes clear our commitment to developing research and technology, acknowledging the vital role that that plays in designing emerging concepts and technologies, and also enabling the Department to scan the horizon for new, potentially disruptive, technologies. The MOD invests around £2.5 billion annually in research and development covering the breadth of technical and innovative endeavours, and our immediate priorities are laid out in the DIS.
	My right hon. Friend the Secretary of State for Defence announced earlier this month our intention to float Qinetiq on the London Stock Exchange. This is a further step in our plans to develop a public private partnership for defence research. It is also the way forward for Qinetiq to continue to supply battle-winning technology for the armed forces, as well as providing opportunities to exploit leading UK technology abroad.
	The step-changes in capability that we are introducing as a result of our continued investment put the armed forces on the footing that they require for the 21st century.
	The drive towards network enabled capability, greater interoperability and the use of precision effects means that we can now do more with less following the enhancements to our platforms and weapons. We must continue our efforts so that that remains the case, which means addressing the business and process of defence procurement. We have work to do in this area, but we have made considerable efforts to improve our performance. That has been reflected in the last three NAO major project reports, which noted year-on-year decreasing costs and time delays on the programmes reviewed. However, we need to do more, and must strive for continuous improvement. The DIS has introduced an ambitious package of change, led by my noble Friend Lord Drayson, and builds on our smart acquisition experience.
	As I am coming to the end, I will give way to the hon. Member for Kettering (Mr. Hollobone).

Philip Hollobone: I am most grateful to the Minister for giving way. He was talking about technology transfer and disruptive technologies and the threat that they pose. Does not drone technology offer a terrific opportunity for our armed forces? Will the Minister assure the House of the importance that he attaches to drone technology and say whether the necessary technology transfer is taking place, and will the necessary command and control of drones be across our armed forces, or remain with one specific arm of the services?

Adam Ingram: I wish that I had not given way now; that is another debate in itself. It may be better if I write to the hon. Gentleman on that. The whole concept of DIS is looking forwards to the new technologies—what is coming along, what is important, what we need, how we define the need, whether there is a key capability and core skill base within this country that we want to preserve, and that also matches our need, and how we deliver all that. I will write to the hon. Gentleman on the specific questions that he raises.
	Our success will be largely dependent on the changes that industry will also need to make, to plan better for the long-term, growing system engineering capability, stimulating innovation across the supply chain and developing the right behaviours. It is ultimately how industry responds to the challenge, and how we demonstrate the DIS in our future investment decisions, that will demonstrate the strategy's success.
	The change programme is a top priority for the Department and the Government. The defence industry will likewise need to move quickly to put both the MOD and industry in the best possible position to achieve the aims of the DIS. We are determined to achieve this and to deliver to the armed forces the equipment that they need for the demands of today and tomorrow. Our people deserve nothing less.

Gerald Howarth: I associate the official Opposition with the remarks made by the Minister and the condolences that he has expressed on the deaths of the two servicemen, Lance Corporal Allan Douglas and Corporal Gordon Pritchard, the most recent casualties in Iraq, and a salutary reminder to all of us and to the nation of the proud part that is played not only by our armed forces but by their families in supporting them. I join him in paying tribute to the families who give this unstinting support, as I know, representing as I do a garrison town. The Minister is entirely right to remind the House and the nation that around the country there are many injured servicemen and women who did not lose their lives, but who every day will bear the scars of the contribution and the sacrifice that they have made on behalf of us all. The House will be grateful to the Minister for that.
	The fact that so many right hon. and hon. Members on both sides of the House wish to participate in the debate is an indication of the importance of defence procurement at the present time. Furthermore, the fact that the Minister's contribution lasted for virtually an hour—although, if I may say so, it was a bit wayward at the beginning—was an indication that he too regards this as an important issue, and that there are a number of very specific factors that we need to address. I am conscious that my right hon. and hon. Friends wish to contribute, and if I miss out something, it is not because I do not regard it as important, but I wish to preserve some time for my colleagues, and no doubt my omissions will be taken up by them.
	I almost begin where the Minister left off, because he referred to the various reports that have been published recently, not least the NAO's major project reports. Since we last debated defence procurement 15 months ago in November 2004, there have been a number of those reports, so the backdrop of this debate is a series of Select Committee and NAO reports highly critical of the Government's management of defence procurement. Once again, Ministers have presented astrategy designed to meet our procurement requirements for the coming decades and to make up for the deficiencies that the previous strategy failed to resolve.
	The 2005 NAO major project report was greeted by the MOD as an improvement on the previous two years, which was hardly difficult given that the 2003 report was described as the worst in the history of the report. As is now customary under the Government, the report still highlighted significant cost overruns and delays, and the MOD's latest projects are now £2.7 billion above the originally approved costs. But that specifically excludes—I understand on grounds of commercial sensitivity—the Typhoon project, which in previous years had accounted for over £2.3 billion in cost overruns. The MOD's major procurement projects also continue to fall behind, with delays increasing by 45 months over the past year. But once again, that figure is affected by the exclusion of the joint combat aircraft, which has had its in-service date mysteriously dropped.
	In a rather underhand attempt to pre-empt the third disappointing major project report in a row, the noble Lord Drayson held a press briefing days before the embargoed report came out, to spin the positive points in that report. The Minister claimed a £699 million improvement in the cost of the 20 largest defence projects. However, as the NAO concluded, those savings came not from efficiency, but from cuts to future capabilities and cuts in the number of platforms.
	Let us not forget that the 2005 report follows hard on the 2004 MPR, which cited cost overruns of £1.9 billion and delays of 144 months. That report followed the disastrous 2003 report that I have just mentioned and its £3.1 billion cost overruns and an average delay of 18 months across the 20 largest projects.

Adam Ingram: Will the hon. Gentleman give way?

Gerald Howarth: Of course I give way to the Minister. He has had a pretty fair share of time already, but I will of course, out of courtesy, give way to him.

Adam Ingram: I just want to get the record straight. We recognise the issues on procurement, but perhaps the hon. Gentleman would like to comment on the fact that in 1997, when the Conservative party left office, the NAO found that the Conservative Government's top 25 defence procurement projects were likely to cost over £3 billion more than they originally forecast, and would on average enter service over three years later than originally planned. In 1997, the NAO exposed the fact that only three of their top 25 projects were expected to enter service at the dates originally planned, and six of them were due to enter service at least five years later than they should have. When the hon. Gentleman makes these assertions and accusations, he should reflect on the past and tell us where they got it wrong, and why they think that we are now getting it wrong with the defence industrial strategy.

Gerald Howarth: The Minister has got a bit of a nerve referring to events of eight years ago. The Government have been in office for eight years, and first they introduced smart procurement, then smart acquisition. There has been new idea after new idea to try to deal with the problem, but the Government have failed, and the NAO reports indicate that. I am sorry to say to the Minister that I will not give way again if he simply tries to blame the last Conservative Government eight years ago. The public are fed up with that. The Government are in charge. They are responsible and accountable, and what is more, we will hold them to account until the day comes, very shortly, when we take over.
	It is not just a matter of the NAO reports. The Defence Committee, chaired so ably by my right hon. Friend and neighbour the Member for North-East Hampshire (Mr. Arbuthnot), Labour members of which are present, has been equally critical, charging in its 2004 report that
	"Our Armed Forces have been let down by the organisation tasked with equipping them".
	That is hardly a tribute to the Minister. More recently, the Committee in its report on two of the MOD's largest and most important projects, the carriers and the joint combat aircraft, concluded that it may be "falling seriously behind schedule" and thereby creating a potentially dangerous capability gap for the Royal Navy. The Committee has also warned that if costs are not brought under control, the project may become "unaffordable". The members of the cross-party Committee are knowledgeable, and they have criticised the Government's performance. After more than eight years in power, the Government have failed to deliver promised improvements on the delivery of equipment to our armed forces. The cost of major projects has continued to rise, and in-service dates have continued to slip—there is no money left in the budget, so allowing programmes to slip is the only way to manage the position. Over the past year, the MOD's unfunded commitments rose by £5 billion to almost £19.5 billion.

Sarah McCarthy-Fry: Does the hon. Gentleman agree with yesterday's comments by Sir Peter Spencer to the Public Accounts Committee on the MOD major projects report? He said that procurement difficulties are due in large part to the "toxic legacy" of previous Governments and that he expects such difficulties to continue for some years to come.

Gerald Howarth: I have not seen Sir Peter's remarks, and I shall read them with great care. Sir Peter is in charge now; the delays are occurring now; and the in-service dates are slipping now. It is no good blaming the Government of eight years ago for something for which this Government have taken responsibility for the past eight years. Sir Peter has been in office for the past two or three years, so he should be careful when it comes to casting beams out of others' eyes.
	Since the Government came to power, spending on defence has fallen both in real terms and as a share of GDP. Defence spending in 2004–05 was almost £1 billion less in real terms than in 1995–96. In 1995–96, defence expenditure was 3 per cent. of GDP, but this year it is set to fall to 2.3 per cent. of GDP. However, our military commitments are far greater today than was envisaged even in the strategic defence review, and they are expected to remain at the current high tempo.
	The Minister has mentioned the defence industrial strategy, which is an attempt to identify the key military-industrial capabilities that we need to retain in the United Kingdom. The document is a move in the right direction, not least because the Government have taken on board what we have been saying for the past three years. In the procurement debate 15 months ago, I called for
	"a mature partnership with industry, with both sides working together from a project's inception through to the completion of its service life."—[Official Report, 4 November 2004; Vol. 426, c. 488.]
	We welcome the Government's conversion to our view.
	If we are to retain certain key capabilities in the UK, it will involve placing some non-competitive contracts. However, we must be wary, because the cost-plus approach has failed to deliver value for the taxpayer in the past. When the MOD seeks a particular solution through a non-competitive contract, we propose that the MOD and its industrial partners should run an open-book accounting system policed by the National Audit Office to ensure value for money for taxpayers. I have discussed the matter with the Comptroller and Auditor General, Sir John Bourn, who confirmed that the NAO could assist in such a scheme. I have mentioned that idea in the past and offer it as a genuine and constructive suggestion to the Minister as a means by which we can retain key industrial capabilities in the UK, where we have only one supplier. I am offering the Minister a mechanism by which we could try to protect the taxpayer interest and retain that defence industrial capability.
	The defence industrial strategy will be judged on how it works in practice. The hon. Member for Tamworth (Mr. Jenkins), who is not in his place, described it as a "MOD wish list" in the Defence Committee on Tuesday, and he was largely right. Furthermore, some serious unanswered questions have been left hanging, and I shall raise a couple of them. On fixed-wing aircraft, the Government appear to accept our strategy of maintaining Britain's aerospace industry by involving it throughout an aircraft's service life. I have always believed that we should provide an income stream to industry to ensure the certainty of which the Minister has spoken. However, the bald statement that current plans do not envisage the UK needing to design and build a future generation of manned fast jet aircraft beyond Typhoon and the joint strike fighter effectively heralds the end of a century of capability in which the United Kingdom has been a world leader.
	Given the uncertainty surrounding the joint combat aircraft programme, I question whether abandoning the ability to make combat aircraft would be foolhardy in the short term and echo the infamous Duncan Sandys 1955 White Paper, which confidently predicted the end of manned flight. I accept that the era of the unmanned air vehicle and the unmanned combat air vehicle has dawned. The United Kingdom must be fully involved in the development of that technology, and I understand that it is. However, it is not in our national interest so lightly to abandon the capability of building manned fast-jet combat aircraft.
	The Minister has referred to "complex weapons"—missiles. The strategy states:
	"Complex weapons provide our armed forces with battle winning precision effects".
	In other words, missiles are critical to modern military operations—the soft speak is for the benefit of groups such as the Campaign Against Arms Trade, which does not like some of our manufacturing industry's products. A few lines later, however, the document states:
	"There is, apart from the Meteor programme, little significant design and development work beyond the next two years. This will present a substantial challenge to the industry."
	The Minister has discussed that point, but what about the challenge to Government? If missile technology is vital, we must establish the means to ensure that we have access to secure supplies. I note that the Minister has said that negotiations are under way, and I hope that he will keep the House informed, because if the DIS statement is right that those weapons are critical to modern warfare, we must retain that capability in the United Kingdom.
	That brings me to the fundamental issue that underpins the DIS. As the Minister has said, the Government accept that
	"to maintain our national security and keep the sovereign ability to use our armed forces in the way we choose we need to retain those key capabilities in the UK."
	The force of that argument cannot be understated. Let us not forget that during the first Gulf war the Belgians refused even to sell us ammunition.
	On ammunition, the DIS states:
	"it is essential we retain onshore the design authority role and its underpinning capability for munitions manufacture",
	but the Government accepted the closure of the BAE facility at Bridgwater, which means that the source of supply will be overseas. In answer to my questions, Ministers tell the House that they are content to rely on BAE for security of supply, knowing that that supply comes from overseas. BAE cannot give that guarantee, because it will be subject to the whim of the overseas manufacturer's Government. The Minister is not entitled to accept a guarantee from BAE.

Lindsay Hoyle: The hon. Gentleman has mentioned Bridgwater. Is he aware that that strategic review also covers Chorley? Without Chorley, nothing goes bang, because initiator and boxer caps are produced nowhere else in the UK.

Gerald Howarth: I understand the point made by the hon. Gentleman, who has repeatedly raised his constituents' concerns about explosives in this House.

Mark Pritchard: Is my hon. Friend aware that those explosives relate directly to the UK's nuclear deterrent? We will no longer have the necessary explosives for that nuclear deterrent in the UK, and we will have to rely on foreign suppliers, which undermines national security.

Gerald Howarth: My hon. Friend is right to raise the matter. The Government owe it to the House to be frank and honest. I recognise that they are having to make hard decisions across a wide range of procurement issues, but the only way in which we can address the matter on behalf of the nation is by being honest and frank. If we allow the supply of critical materials to come from overseas, the inevitable consequence will be that our national sovereignty is impaired.

John Smith: Will the hon. Gentleman give way?

Gerald Howarth: If the hon. Gentleman will forgive me, I want to press on with a few other important issues, one of which is defence research.
	The report says that there is
	"a strong correlation between equipment capability and R&D investment in the last 5–30 years."
	That means that the battle-winning capabilities that we have seen in Iraq and Afghanistan in recent years are theresult of investment in defence research in previous  decades—principally under Conservative Governments, I should like to remind the Minister. It is quite simple. If we want to be able to continue to play a global role and to give our armed forces the best equipment available into the future, we have to invest in research today. At the last election we called for an increase in the proportion of the MOD budget available for R and D. In the DIS, the Ministry appears to share our fears about the danger arising from a failure to make that investment, for it states that
	"in the coming decades the UK could fall behind both our key allies and emerging economies in our ability to support sophisticated and competitive technology-based industries."
	That strikes at the heart of the defence industrial strategy. By their own admission the Government are failing our armed forces. Government spending on defence research has fallen from £840 million in 1997 to about £450 million today. If the Government are to deliver on the DIS they need to commit proper funding for defence research.
	I asked the Secretary of State what proportion of the sales receipts from the Qinetiq flotation will be made available for defence research. The answer that I received from him earlier this week said that a substantial proportion of the receipts would be retained by the MOD, but just what does "substantial" mean? Does it mean that the MOD will retain a majority of the funds? If the Minister cannot put a figure on it until after the sale, perhaps he can give us details of what percentage of the funds he estimates will go to the Treasury and what percentage will be retained by the MOD. Even more importantly, how much of this windfall will be reinvested in R and D, not just swallowed up in the overall defence budget? I hope that the Minister will be able to answer those questions when he winds up.
	That brings me to the questions surrounding the sale of Qinetiq. The Government stand accused of selling off a major British national asset far too cheaply. That has been confirmed by the admission of the Minister's former colleague, who used to sit next to him—Lord Moonie, the Minister responsible for the sale of one third of Qinetiq to Carlyle—that he opposed the timing of the sale. We made our concerns clear at the time of the sale that Qinetiq had been sold off too cheaply and that the sale could have been delayed until market conditions had improved. In January 2003, in the Defence Committee, I asked, "Can you explain to us laymen why Carlyle is paying £42 million for a one third stake in a company with a value capital net of debt of £312 million?" The value of the physical assets alone suggests that it was seriously undervalued at the time. It is now clear that the sale was not motivated by a desire on the part of the MOD to enhance defence research but by the Treasury in a crude move to screw more money out of the MOD to help to plug the Chancellor's black hole.
	There remain unanswered questions over the future of Qinetiq. We need to know precisely how the relationship between the company and the MOD will operate following the flotation, not least in respect of urgent operational requirements for military operations. We also need assurances that intellectual property generated in the UK will remain in the UK and not be siphoned off to the United States or elsewhere. As Qinetiq moves much of its focus to the United States, what consideration has the Ministry given to the possibility of intellectual property transfer to the US then becoming subject to the stringent US export controls mentioned by my hon. Friend the Member for Bournemouth, East (Mr. Ellwood)? What safeguards has the MOD put in place to prevent asset-stripping?
	Are Ministers comfortable that they have engineered an incentive scheme correctly given that a few employees of the company stand to make small fortunes that make lottery winners look like village paupers? I have to confess that some of them are very good friends of mine—[Interruption.] Well, I am looking forward to a very large dinner from Sir John Chisholm, and I have already told him so. [Interruption.] I hope that it will be so good that it is required to be entered in the Register of Members' Interests, and I have made that clear to him as well. However, there is public unease. That points to Ministers' failure to have undertaken a proper assessment of the value of the state asset that they were selling.

Bob Russell: I am interested by the hon. Gentleman's dismay that a public asset is being flogged off at a knock-down price, as I thought that that was the whole object of all the privatisations that we have had.
	On a specific point, does the hon. Gentleman's criticism of the Government about the lack of research and development include military clothing and textile?

Gerald Howarth: I know of the hon. Gentleman's interest in textile issues, which is shared by other hon. Members. Those of us who are a bit more familiar with the armed forces than others understand the importance of good-quality kit, in clothing terms, to our armed forces, particularly those out in the field. When I went up to Arbroath with the armed forces parliamentary scheme, we visited 45 Commando. I was told by one of my more subtle hon. Friends, who shall remain nameless, that if I banged on about the kit, I would get my head banged. When I arrived, 45 Commando, who are some of the toughest guys in the business, had the kit laid out on the floor. They showed us the trousers that were split and the boots that did not work. Clothing is important.
	Returning to Qinetiq, it is now clear that that privatisation has been carried out on a timetable designed to suit the Treasury rather than to enhance Britain's defence research base. The DIS is clearly good news for the prime contractors, not least BAE Systems, which has its headquarters in my constituency, but unfortunately it gives little consideration to small and medium-sized enterprises, whose concerns will need to be addressed. The key is implementation; we will need to see how it is going to work in practice. The strategic defence review was an impressive document, but its implementation has been hindered through lack of proper funding. We will therefore wait to see whether the DIS is to be funded properly.
	Let me turn briefly to some individual projects. On carriers, Lord Drayson's admission to the Defence Committee last year that the MOD was no longer able to commit to bringing the first new carrier into service in 2012 has come as a bitter blow to the Royal Navy. In November 2004, when he appeared before the Defence Committee, the First Sea Lord stated in no uncertain terms:
	"I am still adamant that I want it in 2012".
	That was just 15 months ago. This project has been needlessly delayed. We need assurances that the new assessment phase, which was announced just before Christmas, will be completed within the year. HMS Invincible, already in mothballs, will be withdrawn from the fleet in 2010; HMS Illustrious is to be decommissioned in 2012; and HMS Ark Royal is to be decommissioned in 2015. We need to know what progress is being made on the extension of service of the ships referred to in the statement that the Secretary of State made before Christmas. Have any costings yet emerged from that process?
	The House and the Royal Navy need to be kept closely informed regarding the exact nature of French involvement in this programme. We know that they are going to buy into the design. It is imperative that their involvement should not be allowed to delay construction of the UK's two carriers. Has agreement been reached with France over the charge for the design plans—we understand that it has now been confirmed at £100 million—and is their involvement in the direction of the project more extensive than simply buying the plans?

Mark Hendrick: Is the hon. Gentleman willing to tell the House whether his party is in favour of collaboration with the French on this project?

Gerald Howarth: We collaborated with the French on several projects throughout our time in government. There is certainly no reason why we should not share our design experience with the French. However, I know from talking to very senior people in the Royal Navy that they are absolutely petrified that the involvement of the French may delay this programme. [Hon. Members: "Who?"] Very senior people; I am happy to share their names with the Minister privately. We have to ensure that the programme is not delayed. If we have spent all this time and money on it, and we can make it available to the French at the right price, that is good news, but I do not want them telling us how to adjust our programme in order to be able to accommodate theirs.
	I turn to the joint strike fighter, or the joint combat aircraft, as it has come to be known. The carrier strike capability would not be complete without this second element, yet, like the carriers, the project gives Members cause for concern. That was most recently articulated by the Defence Committee when it reported:
	"We would consider it unacceptable for the UK to get substantially into the JSF programme and then find out that it was not going to get all the technology and information transfer it required to ensure 'sovereign capability'. This needs to be sorted out before further contracts are signed and we expect MoD to set a deadline by which the assurances need to be obtained".
	We understand that talks are now under way with the United States to secure access to the technology over the lifetime of the project. What time scales has the Ministry of Defence set itself? If the United States says no, are we prepared to withdraw from the programme and consider plan B?
	I do not know whether the Minister has read "DefenseNews.com", which refers to talks that are under way between officials, presumably from the Ministry, and officials from the State Department. I would be interested to know whether the report is correct and whether the Minister can update us. The report states that some in the United States Government
	"fear that Britain wants to use its alliance with the United States to get its hands on critical technologies underwritten by billions of U.S. tax dollars, without charge, to prop up its increasingly uncompetitive industry that is starved of domestic technology investment."
	We can agree that there is a problem with defence research investment. We can also all agree that the idea that we put £1 billion into the joint strike fighter programme—

Adam Ingram: Two billion dollars.

Gerald Howarth: I was converting the sum at a rough exchange rate. If, after investing that amount of money, we do not get access to the source codes, that is a betrayal of the alliance. It is not a matter of United States taxpayers' being cheated but of our being cheated as strong alliance partners of the United States. There is common ground between the Government and us on the matter and we stand ready to assist the Government with representations in Washington.

James Arbuthnot: Does my hon. Friend agree that the point of having a plan B is that it should not be kept secret? It is a little like "Dr. Strangelove"—there is no point in having a deterrent if one does not tell people that one has it. Will he please encourage the Minister to tell us that there is a plan B and what it is?

Gerald Howarth: My right hon. Friend perceptively pre-empted my next point. He is right. I was about to quote Lord Drayson, who told the Financial Times on 12 January:
	"I have no sense we need an alternative plan today, and I am not saying that we need to pull any levers on plan B today, absolutely not. But we need to make sure we have done the work necessary to ensure we have an option."
	My right hon. Friend has posed the question, which the Minister has heard. I believe that all hon. Members would like an answer. We would like to know what plan B is. As my right hon. Friend says, if plan B is not public, there is no point in having it.
	As the Minister said, there has been some tangible progress on Type 45s this week, with the launch of the first ship yesterday in Glasgow, which was attended by my hon. Friend the Member for New Forest, East (Dr.   Lewis)—I am delighted that he was able to be there. However, as we discussed earlier, all is not well with the programme. The strategic defence review was predicated on 12 vessels, yet, as the Minister confirmed, that number is down to six, with only the possibility of a further two. That is a serious matter.
	As my hon. Friend the Member for Wantage (Mr. Vaizey) said, HMS Southampton is currently patrolling 2 million square miles of water in the Atlantic ocean. We do not subscribe to the Government's doctrine that platform numbers no longer matter; we believe that they are important. As the First Sea Lord said, one ship cannot be in two places at the same time. Numbers count. We know why the Government have reduced the number to six and are unable to give a commitment for eight, let alone 12. Once again, the Treasury is the reason. The Royal Navy will have its capability reduced because the defence budget has not been properly funded.
	Vic Emery, managing director of BAE Naval Systems told The Sunday Telegraph on 29 January 2002:
	"I believe it's really an affordability issue. There is no doubt the end-user wants eight."
	Reducing the number of Type 45s has implications for our maritime industrial strategy, as set out in the defence industrial strategy. The Type 45 is supposed to provide work for our shipyards until work on the carriers begins. However, Paul Lester, managing director of Vosper Thorneycroft, was quoted in the same article. He said that
	"it is vitally important that ships seven and eight are ordered so that we do not suffer any break in production through to the aircraft carriers and therefore avoid the risk of losing those skills".
	I do not argue that on simply an industrial ground but on the ground that we need the ships. However, I stress that there is an industrial aspect, too.
	One of the Government's most scandalous programmes, which the Minister signally failed to mention, is the landing ships dock auxiliary programme. Although it is by no means the most significant procurement project, it is now, pound for pound, the Ministry of Defence's worst managed project, with 100 per cent. cost overrun. Unbelievably, Swan Hunter—the culprit—has indicated that it expects yet more increases. We have learned that the ships will put to sea incomplete and be promptly sent to repair yards to be finished off under potentially expensive so-called "get well" packages, the cost of which will not appear in the accounts relating to the ships' construction.
	The contract is a public scandal and evidence that Ministers have failed in their attempts to get to grips with the procurement process. Those ships were ordered by the Minister, not a Conservative Government. In view of its performance on the contract, it is earnestly to be hoped that Swan Hunter is not allowed anywhere near the carrier programme.
	Let us consider the future rapid effect system—FRES. Again, the Chief of the General Staff, General Sir Mike Jackson, made it crystal clear that FRES is the most important project for the Army, yet its original in-service date of 2009 has been abandoned.

Edward Vaizey: Does my hon. Friend agree that the Army has been starved of the necessary equipment because so many capital projects are under way with the Air Force and the Navy, and that FRES is the highlight of that starvation? The Army is crying out for the project, which is a decade overdue when we consider the service life of current armoured vehicles.

Gerald Howarth: My hon. Friend makes a good point, but we are considering three services, all of which have a crucial role to play. I am not here to pit one service against another. Clearly, there is competition in the three services for the limited budget. It is always limited, whoever happens to be in power. However, if one wants to play the sort of role in the world that the Government wish to play—I do not disagree with the view that the United Kingdom has a significant contribution to make—one has to divvy up the subscription in order to fulfil the role. My hon. Friend is right that some of the armoured vehicles are 30 years old and, as the Minister knows, they are knackered. I am happy to help try to persuade his fellow Scot that he needs to do much more to help the armed forces.
	I intended to refer to Trident, but I shall leave that to my hon. Friend the Member for Forest of Dean (Mr. Harper) in his winding-up speech. I simply want to put it on record that I have not forgotten ballistic missile defence. The House should turn its attention to that at some point because the United States is developing ballistic missile defence and is convinced that that is critical for the defence of the United States and its allies. The United States is willing to make its facilities and technology available to its allies, yet the Government appear to have no interest in discussing those matters with the United States. As all of us have benefited from the umbrella of the American nuclear deterrent and the American presence on the continent of Europe during the past half century, we ought to look carefully at the offer that the United States is making to help us in that regard.

Robert Walter: Does my hon. Friend agree that the French appear to be developing their replacement nuclear deterrent, and that it would be unacceptable for France to be the only nuclear power on the continent of Europe?

Gerald Howarth: I strongly agree with my hon. Friend. I could not have expressed that point better. Indeed, the only person who might have done so is my hon. Friend the Member for New Forest, East, who is the master in these matters.
	The defence industrial strategy states:
	"We welcome the progress made in establishing understandings on security of supply and the decision to introduce an EU Code of Conduct on Defence Procurement which aims to create an effective European Defence Equipment Market."
	Indeed, the Minister referred to that. The fact is, however, that our European partners have been far less welcoming than the United Kingdom. Spain has already rejected the code of conduct outright, and France appears to be doing little more than paying lip service to opening up her markets. Perhaps the Minister could ask the French whether, instead of buying the plans, they might like to commission an aircraft carrier from a British shipyard. We could build three: one for them and two for us. Somehow, I do not think that that suggestion would go down too well on the Quai d'Orsay, but it might be worth a try.
	For two decades, Britain has led the way in opening up our defence markets, but the time has come for us to let our partners catch up with us before we proceed any further. The European Defence Agency and initiatives such as the code of conduct will have the effect of opening up European defence markets, giving UK companies the kind of access to European markets that European companies have to our markets. If that will also increase European capabilities so that the Europeans can pull their weight more effectively in NATO, well and good. However, if the intention of the EDA is to act as a vehicle for the advancement of the EU defence project, doing little to open up markets or increase capabilities, we will oppose it. It is for similar reasons that we have opposed a military application for Galileo, which, despite protestations from UK Ministers, is clearly under consideration on the continent.
	While we support the Government's reconfiguration of our armed forces along expeditionary lines, and realise that we have neither the funds nor the resources necessary to plan for every eventuality, some thought must be given to tomorrow's threats, at least on a conceptual level. I will not be the first to point to China's growing military and economic prowess. China is already increasing its military spending, with a double-digit increase over the past 15 years, and will undoubtedly want to increase the reach of its military forces. I understand that it is even planning to build its own indigenous aircraft carrier; it will probably not look to us to supply it.
	On the principle that we prepare against capabilities, not intentions, Ministers must recognise the need to consider a conventional threat developing at some point. That is another reason why we need to maintain the industrial capability to respond to any such threat.

Ben Wallace: Given that China is assisting the Iranian Government with missile guidance technology, is my hon. Friend concerned that the Government might at some stage allow the European Union to lift the arms embargo that prevents industries—in France, for example—from selling arms to China? If the embargo were to be lifted, there would be serious consequences for Anglo-American industry relations.

Gerald Howarth: As ever, my hon. Friend is absolutely right. Indeed, I had a meeting with John Bolton last year, and he explicitly stated that the United States would view the lifting of the EU arms embargo on China as little short of a declaration of war—[Interruption.] That was a metaphor, Minister. The fact is, the Americans have attached great importance to this issue. I would say to our American friends that I hope they stick to that policy. I hope that there will be no question of their wanting to lift the embargo on China before the EU does. I am sure that that will not be the case, however. As I have said, we need to be very wary about China, and to be cognisant of the need to preserve our capabilities. Intentions can change overnight; capabilities cannot.
	While we acknowledge that some excellent new military capabilities are coming through, the fact remains that smart procurement has failed to deliver the promised improvements in the process, and the Government are failing to provide our armed forces with the quantity of equipment commensurate with the military obligations that they have entered into. Without a flourishing defence industrial base that continues to deliver state-of-the-art equipment for our armed forces, we shall surrender our own national sovereignty. As some of my hon. Friends have argued, it may be cheaper in the short term to buy off the shelf from the United States, but such a policy would soon change the relationship from one of partners to one of customer and supplier. Nor do I believe that we should simply throw in our lot with our EU partners, some of whom have proved extremely unreliable.
	I believe that we have no alternative but to continue to muddle through, while accepting that there is a price to pay for sovereign command of our armed forces. Much of that is implicit in the defence industrial strategy. I hope that we will all be prepared to pay the price to enable us to prove to the people of Britain that we regard the defence of these islands and the freedom of our peoples as the first duty of Government.

Madam Deputy Speaker: Order. I remind all right hon. and hon. Members that Mr. Speaker has imposed a 12-minute limit on Back-Bench speeches.

Gavin Strang: I am grateful for the opportunity to speak in this debate.
	As an Edinburgh Member of Parliament, I want to put on record the fact that it is a matter of great regret on both sides of the House that the Member of Parliament for Dunfermline and West Fife is no longer with us. I am grateful for the nodding from the Opposition Front Bench. As we know, she developed a great interest in defence matters as a result of the constituency she represented, not least because of the Rosyth dockyard. She specialised in the subject, took part in the graduate, postgraduate and later stages of the armed forces parliamentary scheme and eventually got on to the Select Committee on Defence, although I know that she would have liked to get on to it earlier. Members of that Committee on both sides of the House will confirm that she was a real specialist on defence and made a tremendous contribution on behalf of the British people.
	I want to move straight on to the procurement issue, which is hugely important. I congratulate the Government on their defence industrial strategy. It was important that they published it last December, and I also congratulate the Secretary of State on his statement. The strategy was a step forward in many important respects. Perhaps it did not establish a framework—that is too strong a word—but it was a statement to use for the future. Certain issues are not addressed in the document, while others are perhaps addressed in a way that we would not like. It is important, however, that we have such a substantial document on the defence industrial strategy, which points up some of the key issues that have been discussed, not least that of the United States, on which, given the current situation, the hon. Member for Aldershot (Mr. Howarth) rightly spent some time.
	It is vital that we protect and nourish our defence industrial base. We cannot produce everything, which I think is what the hon. Member for Aldershot meant when he referred to muddling through, although I do not like the word "muddle". We must recognise that we cannot develop expertise in every aspect, particularly of the forward and expensive technologies. We do, however, have something remarkable in this country. In the context of our manufacturing industry, the British aerospace industry is still tremendously successful, but it is at a potential turning-point. If we do not sustain and support that industry, an important part of which is military, we will probably look back in 10 years' time and regret that we did not make the key decisions to help to maintain it and all the jobs that depend on it.
	Time is limited, and I want to move on quickly to the Eurofighter, to which Members on both sides of the House have no doubt heard me refer in the past. I have been concerned about the issue, and I accept fully that my interest is partly due to the importance of the jewel in Britain's industrial crown, as Arnold Weinstock called it—the skills that we have in relation to radar, lasers and so on, predominantly but not just in Edinburgh, in part of what is now called SELEX.
	It is tremendous that the Eurofighter is performing so well. Air force people in America and the other three countries involved, Germany, Spain and Italy, speak highly of the plane. Those of our pilots who have been up in it cannot speak too highly of it. We have got tranche 1 and 2, and we are grateful to the Government for sustaining that programme. Perhaps we would have liked the tranche 2 announcement a bit earlier, but we will not make an issue of that today—it is behind us. The issue, of course is, tranche 3.
	I do not want to inject a partisan note, but the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore) will be aware of concern, to put it mildly, about his party's policy. I am not sure if it has changed its policy, but it emerged before the last general election that the Liberals were committing themselves to no tranche 3 for Eurofighter. If there has since been a change in that policy, I should be pleased to be informed about it. No doubt the hon. Gentleman will say something on the subject. I hope he will say that a tranche 3 may well be needed, because there may well be a need for a Eurofighter that is different from the tranche 2 version, which has ground attack capability but could be improved. We have to think about the future position of the Eurofighter, and also that of the joint strike fighter. I do not know what plan B is, but it will almost certainly have to involve a role for a Eurofighter. A Typhoon could operate from the big new aircraft carriers, but it would need to have short take-off and vertical landing capability.
	If the Government can achieve what we want from the JSF, that is fine. We can make progress. A waiver in respect of the US international traffic in arms regulations will be necessary, and it is not in the gift of the United States Administration or the President. We must get Congress to recognise that we need it, and give us it. There has already been a huge setback, in that we were promised it five years ago and have not been given it so far. We must face up to the position, and I think that we should think in terms of a decision this year.
	SELEX has made a huge contribution to development of the Typhoon, and with its lasers and sensors Edinburgh has won the head-to-head competition for the JSF contract in the United States. That was a tremendous achievement and we welcome it, but we need the technology transfer. We want to ensure that SELEX in Edinburgh can generate the profits that will pay for research and development. We need Government help if we are to maintain our cutting edge in technology. We cannot possibly sustain it if we have to enter into an arrangement whereby, in future, all the traffic is one way. The United States can go it alone, because its R and D expenditure is so colossal and its market is so large. We need that waiver. The position is complex, but it was promised to the United Kingdom and, I believe, to Australia five years ago.
	In a sense, I have no problem with the strategy. It recognises that BAE Systems is a British champion, although most of the equity is now owned in the United States. It sold a number of its Edinburgh assets to Finmeccanica, and it called the new company SELEX. We have Finmeccanica and we have Thales: two very big players in the British defence market. We must bear in mind what we do not want to happen to Finmeccanica, or to SELEX in Edinburgh, in the long term. The Minister rightly spoke of the importance of the upgrading, servicing and maintaining of the planes, which have huge long-term prospects. We should consider how long the Tornado has been operating, and the amount of money that has been generated by its maintenance and upgrading. The same applies to the Eurofighter. The SELEX people in Edinburgh have the expertise and equipment, and if they are the best at making the avionics for such planes they will obviously be the best for maintenance, development and upgrade purposes. We do not want BAE Systems—the British champion—to think that in the long term, it can come back in or squeeze us out. The reality is that Finmeccanica, along with other companies, is there, and the British Government took a very important strategic decision in allowing it to buy those assets.
	We have reached a very important stage in the future of our industry. There is no doubt that we have great strength in avionics and in aerospace generally. I hope that we will not allow the situation to drift. Crucial decisions have to be taken, and if plan B has to become plan A—as it may well have to do—we will probably need to take them within the next 12 months. Reference has been made to a memorandum of understanding being agreed between the two countries' officials. A memorandum of understanding does not sound that strong to me. We will need to examine the situation as it develops, but it is not looking good at the moment. I hope that we can make progress in our talks with the US and find a way to achieve effective and meaningful collaboration and a transfer of technology, so that my constituents can keep their jobs, continue to provide superb equipment—such technology is the best in the world—supply the US market, and help to build the JSF in this country on terms that are mutually acceptable to the US and the UK.

Michael Moore: I begin by echoing the tribute that the right hon. Member for Edinburgh, East (Dr. Strang) paid to the late Rachel Squire, who is sadly missed in all parts of the House not simply because she was an acknowledged defence expert and someone whom the House listened to on the subject, but because she worked unfailingly on a range of activities on her constituents' behalf for many years. She is sadly missed indeed.
	I echo the tributes that both Front-Bench spokesmen paid to the bravery of our armed forces, and I repeat the condolences expressed to the families of those who recently lost their lives. I endorse the observations made about the care of, and needs of, those who have fought on this country's behalf and been seriously injured. We owe them a great duty of care.
	This is an extremely important debate for many different reasons. Defence procurement remains one of the largest areas of Government spending, and we are at a crucial moment in the development of some major projects. Tributes have already been paid to the fact that the Typhoon is now in service, and I hope to deal with that issue and with some of the observations made by the right hon. Member for Edinburgh, East. Yesterday saw the launch of HMS Daring at Glasgow's Scotstoun shipyard. Unlike some other Members, I was unable to be present. The closest I got was a very impressive website broadcast, which showed much of what was going on. But whether one was there or one saw it in virtual reality, it is a fantastic achievement and a great sign of the manner in which we are gearing up our capability.
	As others have said, we have entered a very important phase in the development of the next generation of armoured fighting vehicles. We hope that some indication of the decisions taken on carriers, and on the replacement of the nuclear deterrent, will be given sooner rather than later, but the most important issue in the context of this debate is the defence industrial strategy, which was published just before Christmas. It has been introduced at an extremely challenging time for our armed forces and the industries that support them. In every debate on these matters, the House acknowledges the new world security environment and the huge demands placed on our armed forces, to whom we consistently and properly pay tribute. The changes and challenges facing the country and our service personnel have a major impact on the defence industry, which also faces its own challenges as globalisation and financial pressures keep shareholders and management teams focused.
	Certain key principles need to be remembered in the debate. The requirements of national security are paramount, and we must ensure that our armed forces have the most appropriate equipment and support so that they can do all that we ask of them. In addition, that equipment and support must be supplied on time and at best value for money for the taxpayer. Recent experience in Iraq showed the perils of mistakes in the latter respect, and the hon. Member for Aldershot (Mr. Howarth) has already gone into detail about how NAO reports have regularly documented longer-term failings in procurement.
	The defence industrial strategy is ambitious, and is clearly an attempt to tackle some of the legacies of certain projects and the process of defence procurement. Symbolically, it has got off to a good start, being delivered on time and to a demanding time scale, and it has been well received by industry and many commentators. We support the principle of identifying the key industrial capabilities necessary to underpin national security, and recognise that the transformation of the industrial base is a consequence of that approach. However, we also acknowledge that serious issues will be thrown up as a result. Some questions remain unresolved in the strategy paper, and we hope that we can return to the subject as more detail is fleshed out in the course of the year.
	I shall focus on some of the key themes in the strategy document, and national sovereignty may be one of the most fundamental principles at stake. There is already significant use of non-British suppliers, and there will be more in the future. Even nominally British suppliers are increasingly global and answer to shareholders and stakeholders beyond these shores.
	The UK is at the heart of the north Atlantic and European industries. That is an ideal position that should be exploited, and we therefore join others in welcoming the recent EU code of conduct on defence procurement. We hope that it will help in many of the ways already identified by the hon. Member for Aldershot.
	National sovereignty will arise as an issue on many occasions but, as has already been noted in the debate, the most pressing context at the moment is the joint combat aircraft. Quite properly, the Government have made robust public statements about the need for access to the intellectual property underpinning the JAC, and that approach has been repeated today.
	Britain is a senior partner in the project, so we must have the capability to service and upgrade the planes throughout their lifetimes. Budgetary pressures in the US, and that country's quadrennial defence review, may be squeezing the options just now, but they cannot override that fundamental principle. The Government's determination and the apparent intransigence of the Americans mean that it is important that all parties in this House unite in support of Government efforts to sort out the problem. However, we need assurances that credible alternatives are being planned, as the right hon. Member for North-East Hampshire (Mr. Arbuthnot), the Chairman of the Defence Committee, suggested in an intervention. Moreover, the Americans must appreciate that those alternatives will be implemented if we cannot resolve the present difficulties satisfactorily.
	The Defence Committee has already highlighted the dangers of a capability gap if the JCA were not available to us on the right terms. That would be a massive blow to the defence strategy, and to this country's ability to deliver its defence objectives.
	Cost and value for money are also real issues on this programme and across all other procurement projects. The new strategy is a serious attempt to tackle the well-documented problems. It seems more focused on key capabilities, and transformation of the industrial base is welcome and substantially changes the equation on value for money considerations. Sustaining capability in key sectors will mean consolidation and a reduction in competition, as set out in the defence industrial strategy. In BAE Systems we have clearly created what used to be known, not always flatteringly, as a national champion. It has welcomed the strategy and the clarity that it brings. Coupled with the series of recent announcements about carriers and armoured fighting vehicles it can begin to see how the strategy makes sense for the company. As a world class company of vital importance in both industrial and defence terms, that is a welcome reaction.
	Surely, though, the key to these new arrangements, specifically the partnering arrangements, will be their transparency and openness. There has not always been the easiest of relationships between the Ministry of Defence and BAE, so no doubt both sides will welcome the intent to achieve greater transparency and openness in their dealings. For taxpayers it is vital that the MOD has the access it needs to BAE to ensure value for money. Parliament, too, must have confidence that at the very least our key Committees, whether on defence or public accounts, backed up by the National Audit Office will share in that new openness and transparency. Of course, somewhere in the background the Treasury will have something to say.
	In all these dealings we have to take account of commercial confidentiality. That will become an increasingly important issue where competition is not a driver in the market, so who determines what is commercially confident will be crucial. We must make sure that we have some independent mechanism for scrutinising projects when they go under that heading. We have already seen, in relation to Typhoon, the cloak of confidentiality coming down over the latest cost performance on the project and the arrangement to sell aircraft to the Saudis. We all understand the realities, but we must have confidence that people independent of the main parties involved in the contracts can scrutinise and pass judgment on what is now a fundamental starting point for the new strategy. There is talk of demanding partnered relationships in the document, and we must hope that that will prove to be true.
	The transformation of industry's relationship with Government is only one aspect of the new strategy. A key driver is to shift from a focus on the creation of platforms to one on systems. The complexity of network-enabled capability was demonstrated by the launch of HMS Daring yesterday, which was a helpful illustration. If the carriers go ahead, they will take this to a whole new level. For the next decade there will be good times on the Clyde, the Forth and in many other places. The principle of creating one national shipbuilder may be the inevitable outcome of procurement demands, but as yet there is not much detail to go on. Like others, we want to see that fleshed out. What scale of consolidation is envisaged in creating the new ShipCo and what diversification is anticipated for areas where the next decade may be a feast, but beyond which may be a famine, is not yet clear and we would appreciate understanding how the Government's thinking is developing on that.
	The switch to greater emphasis on systems and their integration offers great challenges and opportunities to British industry, as does the welcome shift to looking at through-life costs, rather than the initial substantial outlay on ships and aircraft. Similarly, stressing the importance of lifetime capability management—a phrase the Minister used earlier—through ongoing support and upgrades is absolutely crucial if many of the mistakes and cost overruns of the past are to be avoided. In that respect, the comments made by the right hon. Member for Edinburgh, East about the skills in Edinburgh are very important for Typhoon.
	We must hope that, whatever industrial structure emerges, it will give plenty of scope for ongoing innovation, much of which comes, in this country, from small and medium-sized enterprises, which need to be encouraged and not put off by the consolidation that goes on around them. SMEs have an important role to play in strategy, which is one of the areas where the biggest concerns have been expressed. Further work is promised on the technology priorities, but as the flotation of Qinetiq is under way, it is a strange omission from the strategy. We must hope that the further work that is spelt out will be completed quickly and we will have a further opportunity to consider it.
	When we debated defence in the UK back in November, I raised with the Minister the flotation of Qinetiq. I stressed that we supported it as an excellent company with world class achievements and that we did not oppose the privatisation. However, it is fair to say that the manner of the privatisation has raised some serious issues. I appreciate that the Minister wrote to me after that debate, although much of what he could say was constrained by the inevitable secrecy ahead of the flotation.
	We still do not have very many answers on the original part sell-off to Carlyle, not least regarding the tax arrangements and the controls on asset-stripping. We also need further details about the relationship with the most important customer—the Ministry of Defence—and about who may be allowed to own the company in future.
	We welcome the decision of the National Audit Office to investigate the sale. The website makes it clear that it will be a wide-ranging investigation, covering everything from the choice of privatisation strategy to whether the deal is likely to meet its requirements. The flotation goes to the heart of the debate on the key principles of national security and value for money for the taxpayer, and we will examine the NAO's report very carefully when it is published.
	Other hon. Members have pointed out that the NAO has its work cut out keeping track of the current procurement programme. Many of the main problems have already been aired and I will not repeat them, but I echo the dismay about past performance and lack of progress on key developments such as the carriers. I hope that at some point we will get some clarification about Typhoon and some more insight into the arrangements that have been made to sell some to the Saudis.
	The right hon. Member for Edinburgh, East said that during the election we made it clear that we did not support the development of the project to tranche 3. We took that decision at the time, based on the information that was available to us and the uncertainty about the future development of other options. That seemed sensible to us, given the way in which the joint combat aircraft was developing. The Minister said today that doubt remains about the next tranche and about the joint combat aircraft. We want to watch those developments carefully and it is incumbent on all of us to reconsider our position if the realities change around us.

Gavin Strang: I am glad to hear that the Liberals are likely to reconsider their position, especially if we need a short take-off and vertical landing plane and we cannot get the joint strike fighter for the future carriers.

Michael Moore: I agree. If the JSF is not available to us and we need a massive rethink of what will happen on the carriers, options with Typhoon will have to be considered very seriously.

Michael Jack: The Government claim that they are committed to 232 Eurofighter Typhoons. The hon. Gentleman, in defining his party's position, says in effect that the project should be kept on the boil just in case there is a problem with the joint strike fighter. Is it correct that he does not believe that 232 would be the operational capability for Eurofighter Typhoon?

Michael Moore: My understanding is that there would be 232 under tranches 1 and 2.

Michael Jack: And tranche 3.

Michael Moore: I apologise if I gave the wrong figure earlier, but, as I said to the right hon. Member for Edinburgh, East, we must keep a close eye on phase 3, especially as the joint strike fighter programme seems to be in difficulty. Clearly, if the JSF were ruled out, Typhoon is the most obvious alternative, notwithstanding the serious technical issues that would need to be overcome.

Lindsay Hoyle: Is the hon. Gentleman aware that the Government invested a lot of money, including in computer designs, to ensure the capability to build a variant that can operate from carriers? The money has already been spent.

Michael Moore: I appreciate the hon. Gentleman's insight, but there is wide debate of the issue and doubts have been expressed publicly and privately. None the less, if the JSF is not possible we shall have to look seriously at what Typhoon can offer us.
	As the hon. Member for Aldershot said, the test of theGovernment's bold new strategy will be its implementation. Beyond the bare bones of the document much detail has still to be provided, but if the ambitions of the strategy are achieved the defence sector and the armed forces will be transformed. The country needs that, and our armed forces deserve it. There is much to do.

David Crausby: I add my congratulations to all those concerned with the launch of the Type 45 destroyer on the Clyde yesterday. It marked an important milestone on the march to a new type of warfare involving the introduction of a series of complicated weapons that will integrate land, sea and air in a way previously not envisaged. The vessel will be a credit to the defence manufacturers, engineers, those who serve in her and the Government for having the foresight and the courage to fund such excellent warships. Once again, it gives the lie to those who say that Labour Governments are not committed to Britain's defence.
	This is an exciting beginning to an era of procurement that will completely modernise the British armed forces. Coupled with the publication of the defence industrial strategy, we are presented with an opportunity to deliver an impressive and profitable future for our defence industrial base. There is of course much to do to ensure the effective implementation of the defence industrial strategy, especially further down the supply chain, because small and medium enterprises will guarantee our future. We must ensure that the policy does not merely protect our major contractors.
	The document should be welcomed as a helpful start, although I am disappointed that the decision to close the Royal Ordnance factories at Bridgwater and Chorley was made before the White Paper. Being wholly dependent on foreign suppliers for the manufacture of our military explosives appears inadvisable, to say the least, but I am sure that my hon. Friend the Member for Chorley (Mr. Hoyle) will have more to say about that if he has an opportunity to contribute to the debate.
	Research and technology are critical to the future of our defence industrial base. I very much look forward to the development of the MOD's future research and technology strategy, because we are undoubtedly in danger of failing significantly behind the Americans if we are not prepared to make greater efforts in that field of expertise. It is vital that we retain the technology independence that has served us so well through the generations.
	With many of our European partners keen to retain a state interest in their defence industrial bases and the Americans increasingly obsessed with the buy American campaign, we should watch our backs. The decision taken by the Americans to deny the UK the international traffic in arms regulations waiver is, quite frankly, an absolute disgrace. It is an indication of how protective and, indeed, selfish our Atlantic allies are when defending their own living standards.
	The US House of Representatives Committee on International Relations warned in 2004 that exempting Britain from the international traffic in arms regulations would increase the risk of sophisticated weapons, perhaps indirectly, being passed to terrorists or unfriendly nations. We are entitled to be offended by those remarks, because this country, with the support of the Government and the major Opposition party, has stuck its neck out in support of American foreign policy further than many of us believe that we should have done.
	ITAR is obviously dead. It may well be that it is not all that important—that is what we are now told, although it was important not too long ago—but we should be appalled by the Americans' decision to distrust us in such a way when dealing with technology transfer. If all that we receive in return for our efforts in supporting George Bush and his regime is condemnation from the rest of the world, topped up with distrust from the Americans, we will simply be driven to think very carefully about our commitments in the future.
	Of course the acid test will be the joint strike fighter, because even though I completely accept that the purchase of the JSF from the Americans represents extremely good value for money, it will be of little use if we are unable to utilise it effectively and to upgrade it, as and when we choose, without having to call on American industry every time that we want to develop something—not to mention the interference of American politicians. We must have access to the software and systems used on the JSF if we are to operate in a network-centric way, if we choose to defend ourselves without the Americans.
	The United States must understand that, if Britain is able to utilise only the weapons that we pay for to their full potential with American permission and agreement, we may as well just leave them to do it themselves, thus saving money and the lives of British soldiers on the way.
	I strongly suspect—I am optimistic—that we will persevere with the JSF, largely because we are so committed to the project, not least given the design of our new aircraft carriers, but we have been betrayed by the denial of ITAR, and we must learn some lessons from the behaviour of Congress. Of course questions about the availability of the short take-off and vertical landing version must be asked and answered urgently, because the impact on the design and cost of our future aircraft carriers, which are the cornerstone of our plans, will be crucial. Most importantly, we must apply the lessons learned from that sorry episode to the transfer of technology and independence when we decide to replace our nuclear deterrent. I urge the Government to ensure that we have a full and extensive debate on the replacement of our Vanguard submarines and Trident missiles.
	I have no doubt that in a world on the edge of major nuclear weapons proliferation, we have no alternative but to retain a British independent nuclear deterrent. While India and Pakistan have a deterrent, with Israel and North Korea almost certainly in possession of one, Iran desperately wanting one, and Taiwan, Saudi Arabia, South Korea, Egypt and other countries waiting in the wings, we have little choice but to retain our nuclear defensive position. We find ourselves within 15 years of the end of the 25-year hull life of the first submarine, HMS Vanguard, although I understand and accept that its service life has been extended to 2024–25. The detail of its replacement clearly must be up for debate. We must decide not only whether to replace it, but the purpose and shape of our future delivery system.
	Given the limited size of Britain's nuclear stockpile, it makes obvious sense to use submarine delivery because air or ground-launched missiles cannot possibly offer us the same security as a submarine. I am encouraged by the determination expressed in the defence industrial strategy to maintain key capabilities in the UK, but I urge an early published resolution to what we intend to replace the Vanguard class with, alongside firm decisions on the acquisition of the proposed Astute class nuclear-powered submarines so that we can ensure, most importantly, that we retain necessary skills and design capabilities onshore.
	The defence industrial strategy is a fine start to what will be an exciting period in our defence history. However, we must ensure that we miss no opportunities to pass the benefits right down the food chain and defend our ability to protect independently our own security.

James Arbuthnot: That was a real cracker of a speech, if I may put it like that, from the Vice-Chairman of the Defence Committee, the hon. Member for Bolton, North-East (Mr. Crausby), who is extremely assiduous and effective in that role. I hope that his powerful speech will be listened to in the United States, where it deserves to be heard.
	Last year, we spent £5.5 billion on defence procurement in this country, which is really quite a lot of money. The overall defence procurement programme going forward is some £75 billion, which is all to provide good and effective equipment for men and women who risk their lives on our behalf. We must do that in a way that gets best value for money, but we must give them that good and effective equipment.
	The Defence Committee, of which I feel increasingly lucky to be the Chairman, has produced several reports on such matters. We produced a report in December on the carriers and the joint strike fighter, which hon. Members have mentioned. The Committee raised the risk that the two carriers would not enter into service in 2012 and 2015 as originally planned. We also discussed our concerns about the joint strike fighter, and we expect the Government's response to the report later this month.
	We also produced the report "Delivering Front Line Capability to the RAF", which came out last month. It reflected our interest in whether equipment in service is supported and maintained in a through-life way, as the Ministry of Defence has suggested that it needs to be. We will produce a report on the major projects later this year that will draw on the most recent major projects report, and we may look at smaller procurement issues just to be different. We are in the middle of an inquiry into the Afghanistan deployment to discover exactly how the Government's procurement decisions work on the ground, and how the Government support the men and women who risk their lives for us on a daily basis.
	Last Thursday, the Committee visited the Defence Procurement Agency. In 2004, the previous Defence Committee said in its procurement report:
	"Six years ago, the Ministry of Defence introduced smart acquisition."
	I hesitate to disagree with my extremely illustrious predecessor as Chairman of the Defence Committee, but that is not quite right. Smart procurement began in the 1990s, when I was Minister for procurement. What began six years ago was clever branding. The aim of smart procurement is to procure equipment faster, cheaper and better. In 2004, the Defence Committee said:
	"On almost all counts it has failed to deliver".
	Why on earth, therefore, do I claim the credit for smart procurement? One reason is that it is beginning to deliver. When the new chief of defence procurement took up his post he commissioned a stock-take of smart acquisition which found that most of its principles had not been implemented fully. When we went to the DPA last week, we were pleased to see many signs that performance has improved. In 2004–05, the agency met five of its six key targets. In its major projects report last year, the National Audit Office reported
	"a net overall decrease in costs of £699 million".
	It said that that decrease was
	"primarily due to reductions in the numbers or capability of the equipment driven by changed budgetary priorities and changed customer requirements".
	It said that some projects
	"compare favourably with our gold standard".
	We were impressed in a number of ways when we visited the DPA last week. It has made a realistic appraisal of performance, which has tended to take precedence in a trade-off with the cost of equipment. Should equipment do 100 per cent. of the work that is needed, or is 80 per cent. satisfactory if performance can be improved later?
	Turning to the structure of the defence industry, I am convinced that a thriving defence industry is vital to our economy. More importantly, it is vital to the defence of this country. On Tuesday, Lord Levene appeared before the Committee, and he said that there is genuine value in competition. He was talking about British industry's relationship with the Ministry of Defence, and he pointed out that there is a danger of countries giving work to their own indigenous industry and failing to receive good value for money. I found that very convincing. The UK is better at avoiding that danger than most countries. My hope for many years has been that, for the best way to get round this, we should have transnational companies that could be regarded as resident in the UK, and in the United States, and in France, and in Germany. If we had two such companies competing with each other inside the UK, we could avoid the skewing of procurement decisions for national political purposes. That means that we would get much better value for money.
	On a critical note, the Government had the chance to consider that possibility when British Aerospace wanted to merge with GEC. The Government should have said no to that merger and told both companies to find other, overseas companies with which to merge. If they had done that, there would have been UK competition, which would have been in the interests of the Ministry of Defence and in the interests of the armed forces, who depend on us to make good decisions. It would also have been good for UK industry.
	So why did the Government not do it? I believe that at the time they were frightened of the markets and of what the markets would say about the Government preventing a merger that two companies wanted. That was a serious failure of courage, from which the UK will suffer. Is there any chance of retrieving the situation? I do not know, but we now see the defence industrial strategy and some of the consequences. Competition is lower down the agenda, partnership is higher up the agenda. There is nothing wrong with partnering. The trouble is that the Government's failure to act in relation to that merger has left us with no alternative.
	The defence industrial strategy has the huge advantage that it was promised for December last year and, for the first time ever in any procurement project that I can remember, it was produced on time—in December last year. As a Committee we are still taking evidence on the DIS, so I shall not say too much. We have some concerns that have come out during questions, particularly about the treatment of small and medium enterprises. We might end up being worried that scant attention is being paid to the key area of research, as there appears to have been a long-term decline in defence research. The essential question, asmy hon. Friend the Member for Aldershot (Mr. Howarth) said, in relation to the defence industrial strategy relates to its implementation. If that is done well, we can be pretty optimistic.
	In ending, I shall say a few words about Lord Drayson, the new Minister for Defence Procurement. I wish, if I may, to ruin his career by saying that he has made a favourable impression. Not only did he produce the defence industrial strategy when he said he would, but he has given a strong impression of knowing industry, being prepared to listen to industry and being prepared to buck the political wisdom that too many of his predecessors, probably including me, were not prepared to buck. He has been among industry and has listened to it in relation to drawing up the defence industrial strategy. It is important that he and it should succeed, and we wish him well in that process.

Dai Havard: I shall keep my remarks short, as those on the Front Benches have again taken up over half the time available for the debate.
	On efficiency, with the amount available for defence expenditure, the problem is how we spend it. As I told the Minister last night, I envisage him going to the Treasury and saying to the Chancellor, "Gordon, I'd like some more money", and Gordon saying, "Well, when you can spend what I give you properly, come back and ask for some more." That has been the problem right through the term not only of the present Government, but of all Governments. It is a huge problem. In that sense, a defence industrial strategy to develop and deploy the industrial policy that the Government have had for some time is a good idea, and I welcome it because it helps to address exactly that problem and has made strides in doing so. However, the role of Government agencies is important, and the Select Committee Chairman referred to the Defence Procurement Agency. That has been a dysfunctional organisation in many respects for some time; it has not had the necessary emphasis in terms of process. The strategy places pressure on that organisation to reform itself so that it becomes an appropriate vehicle within the overall strategy. That is long overdue, but if it happens it will be a good thing. I will welcome it and we will try to help the process work.
	My right hon. Friend the Minister talked about support for fast jets and the Committee's recent report on the matter. He said that the reason for doing what was done was to retain design skills within BAE Systems, but that was not the only reason. That was not the argument that was made at the time for that change taking place. There was also talk of the need for skills to be retained within the RAF being a reason for the change. I am sceptical about that, but we will doubtless address the matter at another time and in another place.
	The question of the C-17s is important. I visited 16th Air Assault Brigade last week, and it is going to Afghanistan. It will test in anger—I hope not too much in anger, but certainly test in practice—the Apache helicopters. It will also test air manoeuvre and support ground manoeuvre. To do all those things, it needs lift, and that is a constant problem. The C-17s have been supremely helpful in dealing with that over a period of time. They did not go through the classic acquisition processes of the time, but they have proved to have been very necessary and very successful, and we could do with a couple more because they are plugging gaps in the process.
	In order to carry out manoeuvre capability, support is necessary. There has been a lot of talk about big toys, fast jets and carriers, but to give that manoeuvre capability to people on the ground requires a strategy. To do all this we will have to collaborate in different ways and there will be different types of collaborators, both industrial and political. The strategy looks at particular types of equipment that are needed in relation to particular sectors of industry. There is an imbalance in the provision within the UK. Wales does not really get sufficient defence expenditure. Hon. Members may disagree, but that is the truth. At the moment south Wales is experiencing difficulties with fast jets. However, we also see opportunities, such as those in the defence training review.
	I want to use this opportunity, not to plead that everything should end up in south Wales—although that would probably be a good idea—but to make a point that goes to the heart of something that was said earlier, and that concerns transparency in process. When deciding where that project should go, transparency is the key, as it is to a number of other matters.

Mark Pritchard: rose—

Dai Havard: I shall not take interventions because I want to give others the time to speak.
	The other collaborators are political collaborators. I do not have time to support some of the remarks of my hon. Friends about the situation between the UK and the United States. Sometimes I ask myself why we are having this aeroplane anyway. Perhaps we should say that we do not want it. Let us have a plan B, C or D. Frankly, the situation is unacceptable. I really resent people who are involved in pork barrel politics in America who pretend to be the great free traders lecturing us on this issue.
	BAE Systems has huge interests in the United States. However, its interests in the USA try to pretend that they are not British and that they are magically part of the USA. The reality is that American companies are the largest investors in the Welsh economy, which has been the situation for years. The interrelationships are not as the prejudiced describe them, and it is about time that those in the USA who peddle such prejudice woke up,   conducted an accurate analysis and reached a proper understanding of technology transfer and the relationship between the two countries.
	In conclusion—

Edward Vaizey: More!

Dai Havard: I am glad that the hon. Member for Wantage (Mr. Vaizey) is enjoying it.
	The Minister has mentioned the key word, "sustainability", and the policy and strategy must together result in correct, sustainable decisions, which is the key to the whole process. Sustainability requires money, so perhaps the question is not who replaces Tony Blair, but who replaces Gordon Brown.

Michael Jack: We have heard some interesting and robust speeches, but I want to pick up a point raised by my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot), the Chairman of the Defence Committee, about Lord Drayson. I want to express my appreciation for the time that Lord Drayson spent with me explaining the thinking behind the defence industrial strategy, and I also pay tribute to his predecessor, Lord Bach, who worked on the issue as a precursor to this exercise.
	I welcome the DIS from the standpoint of a constituency where employment is dominated by BAE Systems, which has argued for so long for a recognition by the MOD of the economic and industrial problems that it faces in meeting the exacting requirements of its principal customer. If, for example, the recognition in the DIS that companies need to make a proper rate of return translates into reality, I hope that it will finally remove the element of suspicion that seems to have dominated the MOD's dealings with business. The MOD has acted as though business might not tell it the truth or that BAE systems might have been overly favoured because of the size and strength of its position in the defence industry. If that openness means genuine partnership and the removal of suspicion, then I, for one, welcome the strategy.
	There is an element of sadness to the strategy, because, as has been said, it signals the end of the UK's ability to build complete military aircraft, something at which we have been singularly good for a long period of time. My concern is that if we need to buy a whole aircraft at some point in the next 30 years, we have signalled that we are not capable of providing an alternative. If those who seek to gain our business are not in partnership with us, they will therefore know, in the nicest sense, that they have got us over a barrel. I would not like to see Lockheed Martin become the Microsoft of military aviation supply, so that whatever is done has to be done with it.

John Smith: We will not necessarily lose that capacity. The skills retained by upgrading and improving existing platforms will allow us to retain the capacity to build, because of the level of systems integration.

Michael Jack: As I shall say about the joint combat aircraft, the hon. Gentleman's observation is true, if we retain the ability to alter the basic structure. In fairness, the DIS states that the unmanned air vehicle scenario is another way of keeping those technologies alive. At the moment, we have an advantage, because we have some of the most modern equipment in the pipeline, but what will happen if the technical advantage degrades over time? There is an awful lot of money in this world, and we have heard that a lot of states could afford to acquire nuclear weapons. Furthermore, Russia has the ability to build advanced fighter aircraft, which it could supply to others.
	I do not know what will happen in the next 30 years. I just want to make certain that my concept of technological deterrence is maintained at a high level to put off other people, and that if we do have to return to building a fast jet, we truly have the capability to do so.
	I want to explore a little further the present situation as regards the Eurofighter Typhoon. The defence industrial strategy is silent as regards the third tranche of that aircraft. I guess that a discussion must be going on in the Ministry of Defence about how many of these aircraft we will want to have an operational capability at any one time, because that will determine the number of aircraft that we buy. If we wanted, say, 40 aircraft, we could do away with tranche 3; if we wanted 80, we would have to keep it. Can the Minister enlighten us on how the thinking is going on that?
	I congratulate all those involved in winning the order from Saudi Arabia for up to 72 Eurofighter Typhoons; that is welcome. However, this is a Government-to-Government arrangement, and at a certain moment in time the aircraft that are going from the second tranche to fulfil the order for the first 24 will be technically owned by the UK Government. Can the Minister therefore assure me that we are not about to be subjected to an example of smoke and mirrors whereby the Government magically acquire 72 of these aircraft, which is more or less tranche 3, sell them to Saudi Arabia, and then put their hands up and say, "Right, we've bought 232 of these, we've done what we said", when in fact they have not answered the question of the RAF's actual requirement. We need clarity on that.
	The defence industrial strategy is also silent on the successor to Hawk. The Government are buying the advanced jet trainer, and I am glad about that. However, at some stage in the next decade there may be a world demand for a successor, and the DIS says nothing on that subject.
	The hon. Member for Bolton, North-East (Mr. Crausby) said everything that needs to be said on the joint combat aircraft. He said it with passion and elegance and I agree with him. However, I draw the House's attention to paragraph A2.12 of the strategy, which says:
	"We welcome the progress made in establishing understandings on Security of Supply (the US/UK Declaration of Principles and the Letter of Intent Framework Agreement)."
	We all welcome it, but the Minister did not give us a clear and detailed explanation of exactly where he thinks Ministers stand in a Government-to-Government sense. I hope that he will be able to comment on that in more detail. Paragraph B4.42 of the strategy says, in reference to the joint combat aircraft,
	"As part of this performance based arrangement, the UK also intends to establish sovereign support capabilities which would provide, inter alia, in-country facilities to maintain, repair and upgrade the UK fleet and an integrated Pilot and Maintenance Training Centre."
	None of that will happen unless the points made by the hon. Member for Bolton, North-East are fully addressed.
	Another part of the latter paragraph deals with the question of whether it is necessary for the United Kingdom, in addition to maintaining and upgrading the aircraft—which is essential for the reasons given by the hon. Member for Vale of Glamorgan (John Smith)—to have a final assembly and checkout unit. I think that it is necessary in order to maintain our skills base. More importantly, as the Minister will know, the success of Case White, the method by which the Eurofighter Typhoons were initially inducted into RAF service, with the RAF squadron based at BAE Warton, demonstrates that a final assembly and checkout unit is a prerequisite of the good introduction into service of this vital aircraft.
	On a slightly discordant note, it is disappointing that while we are arguing about BAE's further involvement in this project, we have seen the silent exit, apart from parts of the STOVL—short take-off and vertical landing—version of the aircraft, of Rolls-Royce as a second engine supplier. If there was any communication—I gather that there was—between our Prime Minister and President Bush, it seems to have been one way. Again, I agree with the hon. Member for Bolton, North-East. It is vital that we say to our American counterparts, "If you really think that partnership means something, you have to come to the party and trust your closest ally with these technologies." There is no point in having the aircraft in service if one cannot look after it, and the best way to understand it is to make it.
	I want to consider some of the inconsistencies in the strategy that appear under the heading, "Sustainment strategy". Although I appreciate that the strategy is designed to sustain and maintain our capabilities, one or two paragraphs require further explanation. Paragraph B4.39 states:
	"Our need to retain a minimum level of onshore capability does not necessarily mean that we will need to support all aspects of our aircraft in the UK."
	What do the Government mean by that? On the one hand, they want to sustain companies such as BAE Systems, but on the other, they appear to suggest that, if they get a good offer for doing some of the sustaining, maintenance and upgrade work from somewhere else, they might accept it. One cannot have one's cake and eat it if one wants an up-to-date military aircraft industry in this country that maintains its capabilities.
	Paragraph B4.40 states:
	"For any particular aircraft type there may also be a middle ground where, to secure value for money for example, we may rely on off-shore suppliers for major upgrade".
	Does that mean that the Eurofighter could go to Italy for upgrading? I should be grateful if the Minister enlightened us further.
	Paragraph B4.41 states:
	"However, major changes must be made in the management and operation of the supply chain to incentivise continued improvements in the support arrangements for this aircraft, ensuring that we retain onshore our ability".
	On the one hand, the document specifies "offshore", and on the other, "onshore". The Government must be clearer, especially given their comments on the joint combat aircraft.
	Paragraph A1.21 states:
	"We must maintain the appropriate degree of sovereignty over industrial skills, capacities, capabilities and technology to ensure operational independence against the range of operations that we wish to be able to conduct."
	That is vital, especially in the light of the Minister's comments at the beginning of the debate that operations occur in which we need to act quickly. Unless we have 100 per cent. capability, we cannot fulfil that requirement.
	There are further inconsistencies. Paragraph B4.23, which covers aerospace systems and enabling skills and technologies, states:
	"Whilst the UK will have an enduring need for access to world leading technology across the range of aerospace systems, it is neither practical nor affordable to retain all the relevant skills and technologies onshore."
	It continues by referring to the underpinning skills and what the Government want to achieve.
	When considering key ingredients in the systems that we currently operate—described as "mission systems"—the strategy states:
	"There is a strong UK based capability in the Mission Systems area, which has enabled the UK to deploy world-class capability without undue dependence on other nations".
	The paragraph concludes:
	"However, this capability is now threatened by an intermittent flow of new programmes."
	Again, one cannot have one's cake and eat it. The capabilities must be maintained.
	I am worried that the time scale of up to 10 or 15 years for further developments of unmanned air vehicles is too long. The use of autonomous air vehicles will be a vital part of future strategy and I hope that the Under-Secretary can tell hon. Members that the time scale will be shortened. I congratulate BAE Systems on its investment in the prototypes and on its achievements.
	When will the decision on Nimrod be made? Is it likely that 12 aircraft will be organised? I welcome the strategy but I hope that the Under-Secretary will acknowledge that we cannot simply pick and choose or have our cake and eat it. We must invest in the best of British technology.

John Smith: I welcome this opportunity to speak in this very important debate. I should like to start by congratulating the Government on the publication of the defence industrial strategy. It was published on time, and due credit has already been paid to the noble Lord Drayson for the role that he played in that. We have had an excellent debate so far on the implications of the strategy, and I want to focus on one important area.
	I believe that the strategy represents a welcome dose of realism. The British defence market is one of the most open markets in the world. We have had a policy of opening our markets for more than a decade, and that is quite right. Unfortunately, our major competitor countries have not reciprocated. The French Government control their key assets and dominate their market through state-owned, nationalised companies, or through national companies in which the Government have a golden share and a direct state interest. They also retain the traditional arsenals, and control all the armaments and ammunitions through Government Departments; they are not even companies. France has a traditional, state-regulated system.
	The United States, on the other hand, claims to have an open and competitive system—indeed, it has federal laws that demand competition. The problem is that that competition is limited to taking place between domestic suppliers. As we know from bitter experience, it is incredibly difficult to break into that market other than through acquisition, as BAE Systems succeeded in doing.
	The defence industrial strategy seems to offer an alternative route. However, I am not convinced that the strategy will deliver what we need. Gaps have already been referred to, and I shall not repeat those points other than to lay down the marker that there is no coverage in the document of the role of small and medium-sized companies. There is also very little coverage of second-tier competition in the supply chain. It is clear that we are going to move further and further towards longer-term partnering agreements, but what role will the smaller companies play in the line of supply to the prime contractors? The danger is that they will move out of the industry as there is nothing in it for them, and they will take their innovation and enterprise with them. I do not think that that problem has been addressed. We wait with interest to see what the Government's position is on research and development, because that subject is also missing from the defence industrial strategy.
	My concern is to compare the strategy, for which we have waited for more than three years, with the original remit of the defence industrial policy. There has been a clear shift in Government thinking in that regard. We have met the challenge in regard to recognising strategic capabilities and defending them, just as the French and the Americans and just about everyone else have done. That is important because we need those capabilities for economic reasons and for defence reasons.
	More importantly, through this document we have told the industry what our expectations are to be over the next 20 to 30 years, which gives it the opportunity to restructure. In answer to the question, "Who will do the restructuring?", the industry will have to do it to meet the challenges presented by the change in the market that is clearly declared in the document. Those are good things.
	My concern is that, in the original document, emphasis was placed on obtaining long-term value for money, encouraging competition wherever possible, and avoiding the creation of monopolies. Those objectives are in the policy—read it. I am not sure that this strategy will achieve those objectives. The policy states that we will require
	"More transparency and inclusiveness within the procurement decision making process",
	and that we demand
	"open and fair competition".
	Some of the partnership arrangements will last up to 25 years with a single company, and there is a danger that we will not be able to meet those criteria.
	Clearly, the strategy contains a shift away from encouraging competition wherever possible, but I happen to think that such competition is good for our defence industries, rather than dependence on a small number of prime companies. I know that this might be unpopular in the Chamber, but I feel that I should relay my fear to the rest of the House about the danger of encouraging one sole monopoly supplier. That is the inherent risk in the strategy. It could be argued that the defence industrial strategy was written by BAE Systems for BAE Systems.
	I am not here to knock BAE Systems. I think that it is a great country—[Interruption] That was a natural Freudian slip. It is a great company, and we should do everything to encourage its success. Removing the pressures of commercial competition, however, will not protect it. We should consider recent history and past defence procurement policies, which did not do BAE Systems any favours. My fear is that this defence industrial policy will not do it any favour either.
	Members might be surprised to hear that it is estimated that more than 50 per cent. of the MOD's large projects last year, measured by value of the contracts, went to one company—BAE Systems. It now has a sole monopoly on support for our main aircraft platforms, as I mentioned earlier in an intervention. What I mean by that is not that we have one supplier, which is not unusual in a contracted industry—it cannot be avoided—but that we have no alternative capability, which is dangerous.

Mark Hendrick: Is it not the case that BAE Systems is, as it describes itself, a systems integrator, and that work goes to thousands of companies, even though BAE Systems gets the contract? Is my hon. Friend suggesting that there should be another national champion, or that the work should go to a foreign company?

John Smith: I think that the Chairman of the Defence Committee addressed one of the possible solutions—to encourage more transnational competition within the domestic market. I do not think that we should replace BAE Systems as a national champion, but we have a duty to ensure that it is an efficient, effective company that can deliver what we want to time and to price. My worry is that over a long period, we might not be able to achieve that.
	I have a little experience of running a partnership, which was very interesting and an important learning curve. We learned three main lessons. There was a lot of discussion about working together, trust and shared objectives. In our organisation, however, we drew three conclusions. First, it is virtually impossible to incentivise a sole monopoly supplier. A contractual system must be developed that keeps that supplier on its feet—competitive, hungry and able to deliver. Secondly, there is only one thing worse than a large, bureaucratic, inefficient, public monopoly—a large, bureaucratic, inefficient, private monopoly. The Government should be wary of that lesson. Thirdly, if one wants a partnership really to succeed, one must find a formula that allows the private sector to do what it does best—to compete, innovate and be efficient, without interference—and the public partners to do what they can do best, equally without interference. I feel that the proposals are too much of a fudge.
	The Conservative and Liberal Democrat Front-Bench spokesmen both referred to some of the recommendations on addressing that matter. We need more transparency—there is no doubt of that—and we need more supervision of long-term partnering contracts. BAE Systems has air support and land support—indeed, an almost complete monopoly on land systems. It is now moving into other areas. We want to stimulate competition, and if we cannot do that we want to monitor the position very carefully. We must have more transparency, and more public scrutiny.
	A major defence procurement project is on the stocks now, probably the largest defence project of all in terms of value. Someone once said to me that it was the biggest public-sector project since the pharaohs build the pyramids. We shall wait and see. I am talking about the bid for the defence training rationalisation programme. The Government must ensure that the evaluation process for the 25-year partnership is conducted robustly, fairly, openly and on a level playing field.
	We should not be asking for special favours. This is a huge project, and we want the right team to implement it. The way to ensure that we get the right bid is to ensure that there is proper scrutiny of the evaluation process now. There should be only one consideration in the choice of bidder: which will provide the best product for the future training needs of our military, which is the best price for the future training of our military, and which provides the best location?
	The Ministry of Defence wants a training facility that is second to none in the world and, for the first time ever, offers tri-service training—training for Army, Navy and Air Force—in an environment that can offer modern training techniques, a modern, adaptive training culture, and the flexibility to be able to change the training requirements of the three services over the next 25 years. I believe that the bid by Metrix Ltd. at St. Athan meets those requirements, but I am not making a special plea. I am asking the Government, when considering contracts that are so important for the future needs of our military for the best possible training, to do so robustly, fairly, openly and on a level playing field.

Robert Walter: I welcome the opportunity to speak. I shall be unashamedly parochial, because the defence industrial strategy is key to the future employment of many hundreds, if not thousands, of my constituents. The parliamentary guidebooks describe my constituency as rolling hills, market towns, agriculture and so on, but it also contains the headquarters of two large, or medium-sized, defence and aerospace contractors, Meggitt and Cobham. Blandford contains the headquarters of the Royal Corps of Signals, and for many years has been the home of the Royal School of Signals. It has been intimately involved in the development of the Bowman project, and is now the home of the Defence College of Communications and Information Systems, to which I shall return shortly.
	Across the western border of my constituency is Thales Underwater Systems in Templecombe. I was very pleased to be there a few months ago when the First Sea Lord opened its new factory extension, which can produce in a single operation the 1 km trails that go behind warships for sonar reconnaissance. It is developing a number of unmanned underwater vehicles as well. A few miles down the road, in Yeovil, is AgustaWestland. All those companies employ a number of people who live in my constituency.
	I want to discuss two big defence procurement projects, both of which are vital to my constituency. The first—the defence training contract, to which the hon. Member for Vale of Glamorgan (John Smith) just referred—is worth £19 billion, and the second is worth £13 billion. Both bring the private sector into defence provision in a way that we have not previously seen, and both raise key questions, a number of which have yet to be resolved. I hope that the Minister can provide answers to them when he winds up.
	The privatisation of the six defence colleges involves a public-private partnership and the spending of £19 billion over 25 years. The Defence College of Communications and Information Systems, at Blandford, is very much a key part of that. Such a partnership is an example of the Government procuring their training needs for the military from private companies. It is very easy to say that it is simply technical training, but much of it is essential military training. The DCCIS provides training in battlefield communications, electronic warfare and a number of other such activities. The Royal School of Signals, which has been at Blandford for many years, is a military establishment, but it has a tradition of employing civilian contractors—individuals and companies—and employees, many of whom are ex-servicemen with the skills needed to train the soldiers of tomorrow. However, they have always been under military control, and there is certainly scepticism among the senior officers involved in the DCCIS about the future under this public-private partnership.
	Such scepticism is based on financial grounds, if no other. A training day at the DCCIS costs about a quarter of the equivalent private-sector training in communications or information technology. So one of my questions to the Minister is, will this contract be viable in the long run? As one senior officer put it to me, what will happen if such training fails? If we are in the midst of a battle and we discover that our soldiers have not had the right training, we cannot send them back for re-training. We have a battle to win and we have to get on and make do. Military commanders are part of a chain, and they feel that if they were in charge, they would have greater control over such matters.
	I have four questions for the Minister about this contract, the first of which concerns its military integrity. Can this essential military training be provided effectively by a private organisation that is detached from the military commanders in the field? I almost intervened earlier on the hon. Member for Vale of Glamorgan in respect of my second question, which is about the financial transparency of this deal. My constituents are very worried that the Welsh Development Agency will dangle sums of money in front of contractors in an effort to move the defence college from my constituency across the Bristol channel to St. Athan. Reference has been made to giving the successful contractor a sweetener of up to £100 million.

John Smith: Will the hon. Gentleman give way?

Robert Walter: I will happily give way to the hon. Gentleman for some reassurance.

John Smith: I can see why the hon. Gentleman did not intervene on me. There is no question whatsoever of the Welsh Development Agency dangling financial carrots to make such deals, because doing so would be unlawful.

Robert Walter: I am not necessarily reassured by that, and would prefer to hear it from the Minister. I am not sure that it is unlawful for a development agency to be involved in bringing jobs to its area, but I know that the RDA in the south-west does not have the money to be able to match the offer.
	My real question to the Minister is: can he guarantee the future of a military presence at Blandford camp, and especially of the defence college? The college is a very important part of the local infrastructure and directly or indirectly employs some 5,000 people in my constituency.
	My second key constituency point about defence procurement has to do with the future strategic tanker aircraft. The selection by AirTanker of the new Airbus A330 200 provides the best value for money and will maximise the UK's industrial potential in the project. It is a truly British solution. The Ministry of Defence has estimated the programme to be worth £13 billion, possibly over 27 rather than 25 years. It would involve the manufacture and supply of a fleet of new Airbus aircraft and their conversion to tanker configuration, the fitting and certification of military avionics, the development of Brize Norton with extensive construction work for ground and air support equipment, and the provision of long-term operational support, including crewing, training and maintenance.
	The A330 tanker has significant export potential, and its launch will have the added benefit of increasing the opportunity for UK suppliers to meet that demand. There is already talk of the French, who have a similar requirement, buying into the same configuration.
	Another question involves what the US will do, given that Boeing was knocked out in the first round of bidding for that country's requirement. I understand that the US could need as many as 300 or 400 tanker aircraft, and there is a real possibility that AirTanker could participate in that. In any event, the project will bring the maximum amount of high-value work to this country, and generate new investment and employment throughout the UK aerospace industry.
	I am particularly concerned about the "probe and drogue" aerial refuelling system that was developed and built at Wimborne in my constituency. It has been used by the RAF for a number of years, and is based on an invention by Sir Alan Cobham, who in the 1930s founded a subsidiary company called Flight Refuelling at Tarrant Rushton airfield in the heart of my constituency. He developed a system that allowed the pilot of a receiving aircraft to catch the fuel hose—the drogue—as it trailed from the refuelling aircraft. The receiving pilot could then draw the drogue in, using a type of harpoon.
	The apparatus may seem somewhat complicated by today's standards, but it was bought by the Americans after world war two. The US air force converted 100 B29 bombers to carry the system, and the planes were redesignated as KB29 tankers. Flight Refuelling has continued to develop the technology.
	Cobham's other subsidiary, FR Aviation, was formed in 1985. It operates out of Bournemouth airport, in the constituency of my neighbour and colleague, my hon. Friend the Member for Christchurch (Mr. Chope). The company is a world leader in the provision of turnkey special mission flight operations, engineering and aviation services. Between 1991 and 1996, it converted the RAF's VC10 aircraft to incorporate the air-to-air tanker refuelling role.
	I want to remind the House of the basics of the matter. Commercial-standard aircraft have been built and tested by Airbus at Toulouse, but the UK will account for half the total value of the basic aircraft. AirTanker will create a centre of excellence for the technology, build new facilities at Brize Norton and run the new systems and support operations. About 75,000 jobs in the United Kingdom are tied up with this. When will the Government finally seal the deal? We have been at this now for six years. AirTanker is the preferred bidder. One of the problems is technology transfer with the United States, but without it there can be no deal because the project is not viable. Unless the United States agrees to the contract specifications that the MOD has laid down, the aircraft is not a viable proposition. Can the Minister please tell me tonight when he will get his pen out and sign the deal with AirTanker?

Lindsay Hoyle: The document on the defence industrial strategy, is important to everybody. The Secretaries of State for Defence and for Trade and Industry are joint signatories because this is not just about defence; it is also about UK jobs. As the only member of the Trade and Industry Select Committee represented here today, I must make sure that that voice is heard. It is important not to neglect trade and industry.
	Rightly, much has been said about the joint strike fighter, the ITAR waiver and UK jobs. Those jobs are important to Lancashire and the aerospace technology and defence systems there. Tens of thousands of jobs rely on the contract. It seems odd to me that the Americans are happy for our troops to go shoulder to shoulder in a trench and to fight side by side, but on technology transfer they ain't playing fair, they ain't playing the game. It is unacceptable for the Americans to behave in that way and we must tell them so if they are to expect our support. We are supposed to have a special relationship. We hear a lot of words about that, but we have yet to see the proof of it. We may see the President with his jacket on walking with the Prime Minister and having a good chat at Camp David, but we want to get beyond the words of Camp David and to secure jobs in the United Kingdom.
	This is not just about having a manufacturing capability; it is about manufacturing the parts and the final assembly of the joint strike fighter. If we are placing an order for 150 aircraft, the least we can expect of the contract is to be allowed to build them here. If others, with agreement, can sell them on to a European nation, why do we not have the same ability? There are questions over maintenance, too. We may be allowed to undertake basic maintenance but there may be a technology bar preventing us from undertaking deep maintenance. We have to put right many issues as soon as possible. It is time that the Americans paid that special dividend.
	Some £2 billion of investment has already been made. What are we going to do? Do we look to the Typhoon as a variant of the carriers? That is the second part: we must not make the mistake of the 1960s when the carriers were not the right size. Carriers must provide a platform capable of taking different aircraft. We must ensure that different aircraft can operate from them. Typhoon may be the answer for the future. We cannot say yet, but we must put pressure back on the Americans.
	The future of fast jets is important for Lancashire. We must have fast jets continuing beyond the joint strike fighter and Typhoon. We must set out our technology needs for the future. We know that unmanned air vehicles will be part of that future, but I do not believe that we have given up on pilots and aircraft. Therefore, there must be investment now. We want to see the Government working with BAE Systems, ensuring that we build on the technology and skills in Lancashire and secure that advantage for the future—way beyond the 30 years that we are talking about now.
	The other procurement issue that we must not forget is NAAFI. I have told my hon. Friend the Under-Secretary before that we must not let NAAFI close. I know that we are pulling back from Germany and there is a question mark over NAAFI there, and in Cyprus and Gibraltar. The profits that NAAFI makes do not end up in shareholders' pockets, but are ploughed back into recreation for the troops. Who else would be working in Afghanistan and Iraq, ensuring that our troops have somewhere for recreation? I make a special appeal on that point.
	The other big issue is Royal Ordnance at Chorley and Bridgwater. Bridgwater produces high explosives and Chorley produces initiators and boxer caps. Nothing goes bang without Chorley. Chorley ensures that explosives work. The French, Germans and Americans would not cease production in their own countries of that vital security need, because they recognise that boxer caps and initiators have to be home-grown. BAE Systems tells us that as a favoured friend of the Government, and to ensure security and sustainability, it should retain missile technology, aerospace and shipping. However, somehow, it fails to mention explosives and the need to enter into a partnership. BAE Systems is five years into a 10-year deal—only halfway through the contract—but it wants to close Bridgwater and Chorley. It is unacceptable for us not to have a capability in the UK and it will have to reconsider its position.
	When BAE Systems bought Royal Ordnance—an unfortunate deal—it was about asset stripping. We know that the sale of the Enfield site recouped every penny that BAE Systems paid the Government for Royal Ordnance. In Chorley, it was like the wild west—it was a land grab. BAE Systems could not wait to sell off acres and acres of land—it has received the money for 600 acres. It now operates on some 180 acres of the site, producing initiators and boxer caps. It wants to close the facility, but it should not be allowed to do so. The Government will say that it is a private company, but it has a contract with the Government, so we should not allow it to close Chorley. In fact, it should be building a new facility for producing boxer caps and initiators. It should sit down and do a deal with the Government and the local authority to release a little more land—the capacity is there—the proceeds from which go to a new production facility to ensure that we have a long-term capability to fight wars.
	BAE Systems has tried short-cuts before. It supplied 21 million rounds of ammunition to the Government that has been dumped at sea because it did not work. We do not learn from the mistakes of the past, but we should learn from the Gulf war, when Belgium refused to supply us with artillery shells. This is a wake-up call for the Government: we need Chorley and we need Bridgwater. We cannot have nuclear weapons without high explosive. A charge—made by Chorley—is packed into the missile that supercharges the high explosive that generates the nuclear explosion. The charge has to be repacked regularly, so we would have no independent weapon if Chorley closed. We would be dependent on the French or the Americans and that would be absurd. We have to tell BAE Systems that it cannot close Chorley or Bridgwater and that a contract should be worked out that keeps both facilities open. The proposal to close is about selling the assets and ensuring as much money as possible for the shareholders, but that is not good for the future of the UK's defence.
	I know that other hon. Members wish to speak, so I shall conclude in a moment. Before I do, I want to remind the House of the bad mistake we made in giving the contract for army uniforms to China. In Chorley and Blackburn, we were producing superb uniforms, of exceptional quality, for the British Army, and then the contract was given to China.
	Let us ask some questions about China. It is important to find out why things went wrong. For some unknown reason, the Chinese made the battledress waterproof, yet everybody knows that uniforms must have breathability. What on earth are we doing? There have been major mistakes. Three garments were tested and there were faults in all of them. Our troops have to operate in the heat and the cold, yet somebody decided to make their uniforms waterproof. What is going on? This is the madhouse of failed economics.
	I ask the Minister: please bring the contract back from China, keep UK jobs, make sure that RO survives at Bridgwater and Chorley and let us ensure that aerospace has a long-term future.

Bob Russell: First, I express my appreciation for the troops from the Colchester garrison who are in Iraq and for those who will shortly go to Afghanistan.
	I shall follow the hon. Member for Chorley (Mr. Hoyle) by talking about clothing and textiles. We might be debating what will happen in the future, but we need to learn the lessons of the past.
	I want to concentrate on the four opening aspects of the smart acquisition life-cycle suggested by the National Audit Office: concept, project initiation, assessment and project approval. In 1997, the Government inherited the relocation of the defence and clothing research establishment from Colchester to Caversfield. At the time, there were 147 staff in Colchester and the number was likely to increase to 156, but the number to be transferred to Caversfield was reduced to 84. The relocation was announced on 1 April 1999—an appropriate date, one might think—although it was more than two years before it happened. There was a year's delay while a private finance initiative was considered and a further year for a value for money investigation by McKinsey.
	Last month, I was advised in written answers that 24 members of staff from Colchester were made redundant at the time of the transfer to Caversfield and only 46 were transferred, so there was a huge reduction. Of those who transferred from Colchester in March 2001 only six remain from what was arguably the world's best clothing and textile research work force.
	I asked the Secretary of State for Defence for an independent review of the operation of the research and development facility following its transfer from Colchester to Caversfield. The Minister of State answered:
	"The future of the Clothing Research and Development facility has been under constant review . . . Independent advisors have already been involved in the review process."
	I then asked about the future of the Caversfield facility and the Minister replied:
	"The current proposal, subject to Trades Union consultation, is to close the Clothing Research and Development facility."
	He said that in future the work
	"would be competed for by industry and academia."—[Official Report, 19 January 2006; Vol. 441, c. 1531W.]
	That bears out the point made by the hon. Member for Chorley: we have lost the capacity in the UK to develop and research vital equipment for our armed forces in the field.
	When the transfer to Caversfield was proposed, I accompanied a delegation from the Colchester work force to meet the Minister to suggest a staff buy-out, but the Government rejected it.
	The Government also refused the concept of privatisation, because they said that the best way forward was to collocate everything at Caversfield. What is necessary is for the Public Accounts Committee, the Select Committee on Defence or, indeed, the NAO to look back on the proposals and compare them with the reality of events as they have unfolded.
	In 1967—some decades ahead of today's concept of tri-service proposals—the three services combined to form a purpose-built clothing and textile research establishment at Colchester. It was the most modern and best-equipped textile laboratory in Europe. The Hohenstein—I hope that I pronounced that correctly—skin model, which used to measure the passage of heat and moisture through all textiles, was the only one of its kind in the United Kingdom. That has been destroyed now. The flammability manikin used in simulations of burning clothing was one of only two in the country. That has been destroyed.
	The development of smart weapons used for camouflage, concealment and deception demands continuous effort to ensure that our service equipment remains fully capable when deployed against increasingly sophisticated technology. A fully equipped laboratory was available for that purpose. The camouflage of tanks, trucks and thermal imaging were majors areas of work—all destroyed. To develop footwear and handwear, there were environmental chambers equipped with heated hand and heated foot devices to enable the accurate measurement of the thermal efficiency of glove and boot designs. Respiratory protection equipment was available to test the quality and fit of respirators. All that has been destroyed.
	The design and development of body armour and helmet and visor materials was undertaken to protect personnel from ballistic and non-ballistic impacts. High-speed photography was used to study bullets hitting body armour. Impact testing was carried out on military helmets. All that has been destroyed.
	We know that lives were saved in Northern Ireland by the research work that was undertaken, because the flak jackets smothered the bullets. Vital research into garment design and clothing and textile development was undertaken. There was a fully equipped garment production workshop, capable of making a wide range of clothing items, with body measurement scanning booths and modern computer pattern grading equipment, but it has all been destroyed. Heavy textiles were designed for use in modern rucksacks, shelters and sleeping systems. Again, all that research has been destroyed.
	Dedicated, loyal staff, who had given years of service, were uprooted, made redundant and their jobs were lost. At least an assurance was given that the work would continue at Caversfield, but the written answers that I received last month show that it will all go. The Government had arguably the world's best textile and clothing research laboratories, but all that has gone—it is all lost—and that is a tragedy. As the hon. Member for Chorley said, it is not right to get cheap replacements from China.
	This is just a flavour of what our armed services have lost. The world's leading research facilities, originally based in Colchester, have now gone. There is no other organisation with the skilled staff available to carry out that vital and often life-saving work. I therefore hope that the PAC, the Defence Committee and the NAO will look back at what was said would happen and consider the reality of what has happened.

Linda Gilroy: I begin, as a number of other colleagues did, by paying tribute to our former colleague, Rachel Squire. She will be particularly missed on the Select Committee on Defence. She had great personal courage. Even after traumatic surgery, she returned to the House. I remember walking to Victoria with her one very pleasant summer evening, when she was looking very positively towards the future. She would have greatly enjoyed the partnership shown in the defence industrial strategy, which, among other things, we are discussing today. I know that she was looking forward greatly to being joined by other women Members representing marine constituencies, such as my hon. Friend the Member for Portsmouth, North (Sarah McCarthy-Fry) and my neighbouring MP, my hon. Friend the Member for Plymouth, Devonport (Alison Seabeck). By this time next week, I hope that we will be joined by Catherine Stihler as the new Member for Dunfermline and West Fife.
	Defence procurement is characterised by many as being pretty dry and expensive, but to those of us with constituencies with defence interests it is important and, indeed, interesting. That is not only because many of our constituents work in the defence industry, but because, as in Plymouth, there is often a larger than average number of constituents in the armed services in areas associated with that industry. As other hon. Members have said, there is never enough money to ensure that we have sufficient personnel and equipment, and there is no other aspect of Government expenditure where value for money is more important. For those reasons, there are few cities and regions in the United Kingdom to which defence procurement is more important than it is to Plymouth and the south-west.
	That was why, as a new MP, I asked for a placement with BAE Systems during an Industry and Parliament Trust fellowship. That was one of the first portfolio fellowships, so I also spent some time with GKN, Shorts and EDS. One of the 25 days that I spent on the fellowship entailed a visit to Abbey Wood in 1999. Smart procurement was fairly new at that time. A great deal was expected of it and everyone was excited by its  prospects. Five years on, there is some disappointment—to put it mildly—that we continued to experience cost and time overruns, especially in 2002–03 and 2003–04, although recent National Audit Office reports suggest that we are now travelling in the right direction. Some have queried how much of that has arisen due to cutting the quantity of programmes, including whole programmes, and the Defence Committee, the Public Accounts Committee and the National Audit Office have been critical of the situation.
	The Defence Committee, of which I am a new member, visited Abbey Wood just last week. As the Chairman of the Committee, the right hon. Member for North-East Hampshire (Mr. Arbuthnot), said, our experience suggested that newer projects might be showing real benefits. When I asked several of the staff who had been involved in a number of integrated project teams what was changing, they talked about the "toxic legacy" that had been left—my hon. Friend the Member for Portsmouth, North used that very phrase earlier. It might well be that the right direction of travel will be continued. The Chair of the Committee also said that the Defence Procurement Agency now has a better focus on recognising, as it puts it, that sometimes the best can be the enemy of the very good.
	The Committee examined Sonar 2087 and Skynet 5, both of which are among the projects that have begun to be delivered that involved the newer stages of procurement and the main gate. Skynet 5 is providing the next generation of flexible and survivable communications services for military service, while Sonar 2087 gives us more capable anti-submarine warfare sensors for Type 23 combat systems. Sonar 2087 was first fitted to HMS Westminster in November 2004. It completed its initial assessment in 2000, went through the main gate in 2001 and was delivered before time. There was considerable environmental engagement and care throughout the project. Such projects and the much more robust and focused Government framework that the agency now has give us hope that more recent positive trends can continue. As a member of the Defence Committee, I will take a keen interest in probing to discover the bits of the programme that are working and the way in which improvements can be made.
	The challenges of making the most of the defence industrial strategy are considerable. When the Defence Committee took evidence from my noble Friend Lord Drayson, the Minister with responsibility for defence procurement, it was fair to say, as hon. Members on both sides of the House have noted, that we were impressed by his clarity and determination. We were sceptical that the defence industrial strategy would be published before Christmas and that it would be sufficiently robust and include adequate detail. A glance at the individual chapters and the overall document is enough to discover that it includes the detail and clarity that we wanted. It has been welcomed by industry, not least in Plymouth. Paragraphs B2.26 to 28 on maritime industry provide the required clarity, and recognise the fragility of the design base and the implications of the blurring of the line between initial build, important through-life support and upgrades of systems. The Subco proposal would tackle those issues and secure value for money while retaining capability, enabling us safely to deliver, operate and maintain those platforms and supporting technologies under UK control and ownership.
	My hon. Friends can be assured that DML and its workers, and those who support them in the naval base and the MOD, know the importance of delivering on those value-for-money issues and have a good local track record. May I point out to Ministers that in recent years the company has diversified significantly? Paragraph 2.42 says:
	"Ownership of UK warship yards has consolidated to two main companies . . . BAE Systems . . . and VT Shipbuilding; with further capacity at Swan Hunter. DML and Babcock Engineering Services have design capability and fabrication skills but, together with FSL, essentially deliver surface ship and submarine support (including upkeep)."
	DML designs and builds complex and highly sophisticated super-yachts, which are equal in size and complexity to a military corvette, and it has won contracts in competition with overseas yards.
	The integration tasks in the final stages of a refit and upgrade of a major surface ship or nuclear-powered submarine are just as complex as the equivalent tasks on a new build and sometimes, indeed, are even more complex. When commissioning and setting to work naval platforms such as the future aircraft carrier, the skills base at Devonport can be used to achieve the timely and successful delivery of the imminent new-build programme. In future, there will be a significant increase in the shipbuilding programme, so capacity is a consideration. At the same time, however, a significant proportion of the skills base at Devonport will become available as a result of the downturn in the refit programme. As we develop our marine industrial strategy, I hope that we will look at the way in which we will tackle shortage in capacity. We should bear in mind the competitiveness that the Devonport work force has developed by diversifying into private sector work. I welcome what my hon. Friend the Member for Bolton, North-East (Mr. Crausby) and others said about the future of the nuclear deterrent and the importance of retaining skills and capability.
	Having raised those local issues, may I conclude with a couple of concerns about the White Paper? The Minister and others have mentioned small and medium-sized enterprises. Devonport has 4,700 employees, but the huge supply chain increases the number of workers to more than 10,000 in 420 local companies. In the south-west region, 60,000 people are employed in defence work. Aerospace employs 43,000 full-time equivalent employees, and the supply chain another 100,000. I share the concerns that have been expressed about whether small and medium-sized enterprises have been fully involved in the evolution of the White Paper. There is still time to do that. I would welcome reassurances from my hon. Friend the Under-Secretary about how that can be achieved—in the case of maritime enterprises, through the industrial strategy. In relation to aerospace skills there needs to be careful involvement of those representing the industries—the trade associations, the regional development agencies and so on.
	A debate is being held in Westminster Hall on employer engagement in further and higher education, in which I would have liked to highlight the importance of the higher education innovation fund research stream in sustaining and developing knowledge partnerships. That, too, is important to some industries, particularly the small and medium-sized enterprises that we are discussing.
	Finally, I acknowledge what my right hon. Friend the Minister said about partnership and partnering being seen as the way to achieve value for money—

Mr. Deputy Speaker: Order. The hon. Lady has had her time allocation.

Douglas Carswell: Others wish to speak, so I shall be as brief as I can.
	There is something profoundly wrong with Britain's system of defence procurement. That is not my assertion, but that of Lewis Page, author of the recently published book on defence procurement, "Lions, Donkeys and Dinosaurs". Mr. Page's highly readable account of the monumental incompetence of our defence procurement regime is, I hope, on the Minister's reading list. If not, I would be delighted to lend him my copy for him to read afterwards.
	According to Mr. Page, the UK spends about £30 billion each year on defence. His book shows what extraordinarily bad value for money we get—or, should I say, our soldiers get. It is a damning tale that does far more than condemn the actions of any single here today, gone tomorrow politician. Rather, it raises serious questions about the future of our defence industry and the MOD—an institution that Mr. Page compellingly portrays not so much as the Ministry of Defence, but as the Ministry stuffed with dinosaurs.
	In reminding the House of one or two instances of particularly gross MOD incompetence, I am not seeking to make partisan political points. The MOD's failings have been manifest under Governments of both parties. I am also not especially interested in which side of the House hon. Members happened to be sitting on at the time of the MOD's bungling. Rather, I seek to make thepoint that the incompetence of our defence procurement regime is so profound that it is time to contemplate a bold and radical alternative.
	Do hon. Members remember the SA80 rifle? They might not, but our soldiers still have to cope with it. It began life in 1985 with several glaring design flaws. The decision was taken after 1997 to spend £92 million to sort out each of the 200,000 flawed rifles. That works out as an additional £460 to make each gun function properly, after its development and production costs. The MOD asserted that that was cost effective. Had it the wherewithal, however, the MOD could have spent that £92 million on, for example, the American M16, at a mere £400 each. Instead, for reasons that are unclear to me, the MOD spent that money upgrading a rifle that no soldier, when asked to select their own weapon, would choose.

Adam Ingram: I am sorry for interrupting, but I went through that entire process. I put the rifle under intensive test by soldiers and I have a vivid memory of a Royal Marine sergeant saying that it was the best rifle he had ever handled, and a paratrooper sergeant saying the same. One of them had been a sceptic and said that he did not anticipate that when he went into the tests. The hon. Gentleman should speak to members of our armed forces about the quality of the rifle that we now have. I agree about the past. That is why we had to fix it. It was one of those legacies that we had to address.

Douglas Carswell: I note that those parts of our armed forces allowed to choose their own weapons, such as the special forces, do not choose the SA80.

Tobias Ellwood: I was one of those soldiers who had to use the SA80. It is not a great weapon. What makes that weapon great is the SUSSAT sight that is placed on it. Anyone who has been to the Royal Ordnance factory will know that that bullpup design came around in the 1940s, not after the Fabrique Nationale's SLR was made. It is not a great weapon. It is its sight that has made it. The Army or the Marines do their best with the equipment that they get. That is the situation.

Douglas Carswell: To press on, do hon. Members remember all the Apache helicopters that we bought? It was sensible, was it not, to buy all that tried and tested American kit, yet the MOD managed to bungle even that. Israel managed to buy Apaches at £12 million a piece. Somehow the chaps at the MOD managed to spend £40 million on each one of them.

Edward Vaizey: On that point.

Douglas Carswell: Many wish to speak—

Mr. Deputy Speaker: Order. The hon. Member for Wantage (Mr. Vaizey) has only just walked back into the Chamber. He ought to exercise some restraint because we are running out of time. If he hopes to catch my eye later, it would be a good idea not to extend speeches; otherwise insufficient time will be left.

Douglas Carswell: Apparently, it was something to do with wanting to assemble the Apaches in Britain to maintain jobs—a good idea, one might think, until one realises that we could have bought the helicopters directly from the Americans, given each one of the 755 employees working on the assembly line £1 million to retire on, and still have saved ourselves £1 billion in the process. Many of the procurement problems surrounding the Apache, like the SA80, have carried on regardless of which party has held office.
	Why is our system of defence procurement quite so hopeless? There are three key reasons. A large part of the reason is that those people in charge of it—I mean really in charge of it; the senior civil servants at the MOD—simply deny that it is hopeless. Those 300-odd senior MOD civil servants who rate themselves of equal rank to admirals, generals and air marshals are not part of the problem—they are the problem. There will be no serious progress in our defence procurement strategy without root and branch reform at the MOD. In any other sphere of life—in business or in the charity sector—a senior director responsible for such bungling would face real consequences, but not at the MOD. This remote and unaccountable elite makes monstrously poor decisions and British soldiers face the rap. No one is accountable. No one is sacked. This is how our defence procurement is run.
	Many are the discussions to be had over Britain's strategic priorities. Many are the debates to be had over the best weapon systems, over the SA80, over the Type 45 frigates, over the Chinook HC3s and over UAVs. But what we really need to deploy if we are ever to have value for money in our defence procurement is the P45.
	To ward off accusations of gross incompetence, the MOD has now adopted a smart acquisitions policy. I was against the dumb acquisitions policy that it had before, but I note that the projects continue to overrun in terms of time and money. I would venture that, as long as the MOD continues to be a monopoly purchaser and BAE Systems continues to be a virtual monopoly provider, there is something inevitable about that, and the Government's defence industrial strategy does little to change it. Buying British is not always best. It is more important to ensure that our armed forces have the best kit that we can afford than to prop up UK defence plc.
	A further reason why I believe our defence procurement is hallmarked by incompetence has been its creeping Europeanisation. Even the most diehard protectionists recognise that the costs and complexities of weapon systems are such that it is unrealistic to buy entirely British, yet many of the so-called defence strategic arguments, once advocated by those committed to defence-industrial autarky, are now regurgitated by those who argue that we must buy European. There are many better alternatives for this country to pursue than further Europeanisation. The MOD has implemented by stealth an EU-facing defence procurement policy. It is yet one more reason why it is time to give serious consideration to the future shape of this Whitehall Department and the many thousands of paper pushers she employs.
	To conclude, I hope that the Minister and many others in the House will read Mr. Lewis Page's excellent book. I hope that the Minister will go back to his Department, that he will stop regurgitating the departmental orthodoxies of the defunct MOD, and that he will implement and create an effective defence procurement policy inspired by much of what Mr. Page has to say.

David Wright: It is an interesting experience to follow the hon. Member for Harwich (Mr. Carswell). I will pass on his comments about pen pushers to hundreds of my constituents who procure products for the MOD. I am sure that they will be delighted to hear what he had to say.
	This afternoon, we have heard about a series of procurement issues, including aircraft, naval products and textiles. It is important to remember that large teams of people work for the MOD procuring those items, because we have not discussed the civil servants who work in supply and purchase. More than 400 people in my constituency work in the Defence Logistics Organisation at Sapphire House. I am concerned about their future, because the MOD has proposed the collocation of a number of staff from Sapphire House to an acquisition hub in the Bath-Bristol area. I know that Ministers have not made a final decision on that matter, but rumours about the collocation proposal and the acquisition hub have been circulating. I hope that the Minister will reassure my constituents about their future in his winding-up speech.
	In July 2005, the MOD announced its plans for the acquisition hub. From August to November 2005, a combination of rumour and comments from senior management indicated that the plans were more advanced than staff realised and than the MOD would admit publicly. As has been said, the MOD purchased a building in the Bath-Bristol area to which it might move staff from Telford to work on DLO acquisition activity. On 21 December last year, the Minister wrote to me to confirm the purchase of that property, which was not a nice Christmas present for staff in Telford.
	I want to discuss what makes Sapphire House in Telford unique. The procurement and provisioning support for all in-service Army equipment is undertaken at Sapphire House. That work is supported by bespoke IT infrastructure, the PUMAS and PWB systems, and it has been performed in the Telford and Shropshire area for more than 60 years. That business output to the DLO is not replicated anywhere else in the UK.
	Additional evidence of the unique role of Sapphire House is found in a key measure of the field Army's ability to deliver its military capability. That measure is called underlying availability, which defines the spares support available in the supply chain and is critical to force sustainability during both peacetime and operational periods.
	The DLO procurement reform team, DLO category managers and a small contingent administering the MOD's purchase to payment strategy are also based at Sapphire House. Those teams tap into the bespoke Sapphire House IT systems and, more importantly, utilise the Sapphire House community to interpret and capture commercial and procurement data. Sapphire House is also contributing significantly to the much-heralded—this afternoon—industrial strategy recently launched by the MOD.
	Sapphire House is also unique because it houses a number of non-DLO integrated project teams, the Defence Communication Services Agency and the integrated project teams working under the Defence Procurement Agency. That profile demonstrates integrated working and provides a snapshot of what the MOD is trying to achieve in the Bath-Bristol area. The MOD wants to collocate activity to the Bath-Bristol area, but it has already done that in Telford, so I hope that it does not move staff again.
	The DLO gets a good deal out of Telford, which is evidenced by the excellent recruitment and retention record of staff in that locality. Indeed, 67 per cent. of the work force at Sapphire House is based on administrative grades and is therefore paid a relatively small amount. The MOD gets incredible value for money from those staff. If we move their activities to the Bath-Bristol area, we will not get the same output from the same grading of staff in that locality. That value-for-money aspect cannot be replicated.
	One of the issues that local trade unions have raised with me is that although MOD proposals suggest collocation in the Bath-Bristol area, most staff in Telford will not want to move. Surveys carried out by the unions of those 400-plus staff find very few people who want to relocate their activities to that area. People do not want to move their families down there or to break their links with the local community. In many cases, whole families have worked for the MOD in Telford, whether at the old Donnington depot or at theESPPA—Equipment, Support, Provision and Procurement Agency—facility at Sapphire House. My concern is that if we collocate activity in the Bath-Bristol area, we will lose essential skills that we have built up through the DLO Telford teams from the ashes of the change that occurred in 1995 when the Chilwell and Donnington sites were amalgamated.
	I hope that Ministers will take a step back for a moment in relation to Sapphire House, and think about the skills and quality of the staff there in procurement terms and about what they will lose if people do not move down south in the event that activity is collocated in the Bath-Bristol area. Sapphire House is home to two bespoke IT systems and, uniquely, houses more than 330 highly skilled, fully trained provision and procurement operatives. It has a critical role in running a further 10 IT systems essential to effective inventory management and supply chain operation. This is a quality facility with staff who are very committed to the MOD.
	The staff and the trade unions have produced a so-called straw man paper that looks at alternative options. The unions are not particularly opposed in general terms to collocation, but they still see an ongoing role for MOD presence in the Telford area. The paper discusses the retention of skills and staff at Sapphire House. The proposal has been withdrawn, as the Minister confirmed, but I hope that we can breathe some new life into it and that Ministers will be willing to meet trade union representatives again to talk through the future of the paper and to see whether there are any opportunities to retain those skills and staff in Telford.
	I want to refer in closing to the comments made by my hon. Friend the Member for Vale of Glamorgan (John Smith), who mentioned the defence training review. It is important that we have a clear, transparent and open competition on defence training. I hope that the Department will pursue that line effectively. Under one option St. Athan would be the prime location; under the other option, which I clearly support as a Shropshire MP, those activities would go to Cosford. It is probably fair to say that both sites have great advantages. Both could be seen as high-quality training facilities for defence. I just want us to have a fair competition and a fair decision based on the facts. We can then move forward with quality training environments for all our people working in the MOD.

Angus MacNeil: May I associate the Scottish National party and Plaid Cymru with remarks that were made earlier and extend our sympathies to the families of the bereaved and those who have lost their lives? May I also mention the injured and the wounded, who must not be forgotten by Government of whatever shade, or by this Parliament, for the rest of their lives?
	I intend to keep my remarks short. Many issues have already been mentioned, and I hope that as a result of my brevity the Minister will respond to the specific points that I raise.
	There are many aspects of defence procurement, but I want to concentrate on one specific issue. I am, of course, honoured to take part in this debate as the elected representative for Na h-Eileanan an Iar. An aspect of chief concern to my constituents is Qinetiq and the possible impact of its privatisation on the future livelihoods of 240 at the Hebrides base between North Uist, South Uist and Benbecula. It has been reported that Qinetiq in general has about 5,000 patents granted and outstanding. A great deal of intellectual property is clearly being sold, the value of which would be very hard to quantify.
	As some hon. Members know, the Qinetiq range in Uist is large and stretches far to the west beyond St. Kilda. There is no land beyond that except Rockall on the way to Newfoundland and Canada. It is an ideal place for missile testing.
	Missiles are critical to modern military activity, as the hon. Member for Aldershot (Mr. Howarth) asserted earlier. Given that they are critical, we need to retain the capability for testing and training.
	I was recently fortunate enough to visit the Qinetiq range and see some of the highly skilled and specialised work that the operatives undertake. The Hebrides base is a tremendous facility. Its size gives an almost unique controlled environment for the conduct of test and evaluation firing of land, sea and air weapons, and the firing of in-service missile systems.
	The base also accommodates the operation of unmanned air vehicles—UAVs—which are used for missile training, especially for the Rapier missile. It is encouraging that use of the base is not confined to UK armed forces. Recently, the Swiss and Swedes, among others, have used the resource and expertise at the base. I have travelled with ferry-loads of American soldiers, stationed in various parts of Europe, who find it far more convenient to go to Uist to train with missiles than to return to the United States.
	I would like an assurance—if possible, a cast-iron guarantee—that the privatisation of Qinetiq will not put the range at Uist at any risk. Does the Minister view the Hebrides range as a key capability in the context of the defence industrial strategy? How can the Minister guarantee that, some day, under pressure from shareholders—some as far away as America—a private company will not close such a strategic facility in some sort of rationalisation of Qinetiq?
	Indeed, the same could be said of other Qinetiq sites in Scotland such as Rosyth, Wester Ross and many others. Can the Minister guarantee the continuation of those bases when a key part of the defence industry is privatised? Viability might no longer be determined by strategic importance but by shareholder considerations and the bottom line.
	It could be argued that defence procurement budget spending in Scotland is, in terms of per capita spent, approximately £500 million lower than it should be. However, tempting as it is to trade such statistics with the Minister, I should like him to concentrate on the position of Qinetiq and how it affects Scotland.
	I currently question how we can be certain that a private company in a monopoly situation cannot hold a Government to ransom when we have no other provider. Could it not add to the problem of cost overruns?
	To achieve my aim of brevity, I shall make only two further points. The public cannot buy shares in Qinetiq. Only those who are described in common parlance as fat cats can do that. Why will the Qinetiq working man or woman in Uist or Rosyth be allowed to purchase only £500 in shares when the top brass walk away with £40 million? Is that not a slap in the face for the hard-working employees at Qinetiq? Is it not a slap in the face for every hard-working man or woman who, like my father, once believed in Labour values and traditions?
	More than a year ago, 10 RAF personnel tragically lost their lives in an air crash in Iraq when a right wing fuel tank exploded. An RAF pilot, Nigel Gilbert, has been reported as saying that the consequences might not have been so serious if the aircraft had been fitted with fire retardant protective foam, without which the Americans and Australians would apparently not fly. I am no expert but I and, I am sure, many others would be grateful if the Minister shed some light on that.

Sarah McCarthy-Fry: The city of which my constituency forms part has been at the forefront of defending our shores for more than 800 years. Portsmouth naval base is the home port of the Royal Navy and the defence industry is inextricably linked with the city's economy. It is therefore no small wonder that the companies that operate in my constituency have eagerly awaited the defence industrial strategy.
	Times have moved on. When I first started working in the defence industry it was in the days of cost plus. A contractor would submit its costs, the Ministry of Defence technology cost team would audit the submission, we would argue about the overheads, reach an agreement, add on 10 per cent. or so for profit and that was the price that the Ministry paid. It was cosy but unsustainable and it did not give the taxpayer value for money. So we moved to competitive tender and fixed price, which required not only defence contractors but the MOD's own work force to take a long, hard look at their cost structures, and some painful decisions had to be taken in the interests of value for money for the taxpayer.
	Only a few months ago, the Minister of State, Ministry of Defence, my right hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Mr. Ingram), had to announce the closure of the engine maintenance business at DARA Fleetlands, as it was unable to compete with other contractors. I expressed the hope at the time that, as we had a strong and stable economy, those skilled workers could be retrained and would find new jobs. I was therefore delighted to read in the press last week that that is exactly what has happened. The helicopter repair side of the business at Fleetlands is booming so much that an additional 200 engineers are required, and the directors at the site are keen to retrain those engine support workers to fill those roles.
	Nevertheless, the competitive tender and fixed price arrangement is not a panacea. It gives the MOD short-term value for money, but not necessarily best value in the long term, because it risks contractors underbidding to win the work, then being unable to sustain long-term production, or ratcheting up the price for product support, leading to higher costs over the life of the product. The defence industrial strategy seeks to remedy that by promoting a partnership and alliance approach. I welcome this approach, and I am sure that companies in my constituency will also do so, especially those operating in ship support, such as FSL.
	I welcome the recognition that the lowest bidder is not paramount, and that national security, national skills and the UK manufacturing economy are also important in defence procurement. However, this requires flexibility on the part both of the MOD and of industry. Certainty is the key to long-term strategic planning in business, and true partnership means true risk sharing. It means being able to offer a degree of certainty through the life of a project. Whole-life support is probably worth more to a supplier than the initial production, but the MOD needs to be sure that suppliers can sustain that whole-life support, and there needs to be a degree of trust on both sides. The flip side of that stability and certainty must be a commitment on the part of industry to implement continuous improvement, to continue to engineer cost-downs without the incentive of re-bidding at every stage in a project's life, and to share the benefit of those cost-downs with the British taxpayer.
	I welcome the statement in the defence industrial strategy that value for money is the bedrock and that competition is a major element in value for money, but also the recognition that when a better outcome can be delivered or when national sovereignty or security is under threat, long-term partnering agreements will overcome competition. I do, however, share the concerns of many hon. Members who have spoken today about small and medium enterprises. While the larger contractors in my constituency will, I hope, be major beneficiaries of these long-term partnering agreements, to what extent will SMEs benefit?
	Many SMEs operate in my constituency, and I want to ensure that the skills base that we have there is maintained and that it grows. There is a concern about offshoring, not only in defence manufacturing, but in all manufacturing. I believe that the answer is to concentrate on the things that we are good at, at the high-skill, high-tech end of the market. We need to foster those skills, and ensure that we keep them in this country. As warfare changes from using brute force heavy equipment to faster, cleverer, flexible and electronically networked equipment, we will need those high-tech skills to manufacture and support it.
	Many SMEs in my constituency are bidding for work in the defence sector, and that is why I am concerned that long-term partnering agreements, important though they are to the major defence companies, might push out the SMEs. It has already been pointed out that the success of this strategy will be in the implantation. I would like to see some contractual commitment in these partnering arrangements to pass work down to smaller companies.
	We need SMEs; they are often the seedcorn for innovation. A smaller organisation often has a different attitude to risk, and encourages entrepreneurship and innovative thought. If we are moving towards longer life platforms, we will need innovative upgrades if we are going to keep at the forefront of fast-moving technology. We will need the ability to respond rapidly to new ideas. We need to ensure that our procurement processes encourage innovation and entrepreneurship as well as the basics of cost, quality and on-time delivery. And we need to keep the door open to new entrants in the market.
	We need to ensure that our troops get the best possible equipment, ready for action, when and where needed, at a cost that the taxpayer can afford. I commend the defence industrial strategy, as it seems the way forward to deliver that. I hope that the Minister will take on board my concerns about SMEs, and I hope that workers in my constituency will continue to play their part in delivering high-quality defence equipment for the next 800 years, as they have contributed to this country's defence for the past 800 years.

Maria Miller: I am grateful for the opportunity to speak in today's debate, which is important not just because we are discussing the future defence of our country and £6 billion of Government expenditure on procurement each year, but, as the hon. Member for Chorley (Mr. Hoyle) said earlier, because defence is at the heart of much of Britain's manufacturing industry. Much of the expertise and many of the jobs in the sector are inextricably tied to the future of defence in this country. In my constituency, Basingstoke, in north Hampshire, we have a great deal of expertise in the sector, which provides a tremendous skilled work force. Importantly, it is also a catalyst for many other businesses in the area, which rely on our defence industry for their livelihood. It is therefore vital that we hold the Government to account in this important sector.
	Despite the smart procurement initiative introduced in 1998—I recall, however, that my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot) said that its roots might lie deeper in time—important defence projects are still regularly coming in over budget and late, which in any other sector of industry would be unimaginable. I reflect on the fact that the most recent National Audit Office report on major projects in 2005 found that the largest projects are almost £3 billion over budget, that financial savings are coming solely from cuts in future capability and not necessarily from efficiencies, and that delays in delivering projects have increased by 45 months. The MOD identified that many of those time and cost overruns were driven primarily by its actions, such as changes in specifications and budget constraints.
	It is therefore little wonder that, for the Government, defence procurement is an ongoing process of attempting to reduce waste and ineffective management control. There have been no fewer than four iterations of defence procurement rules since 1997, creating a great deal of change in the sector. The Government's strategy over that time, as I try to piece it together, seems to be to achieve a better balance between best value and protecting domestic research and manufacturing capability. Of course, the Government's push for an increase in competition in the sector should be applauded, although the NAO report suggests that there is some way to go until we see the full fruits of that labour.
	Unlike many other sectors of manufacturing industry, however, the defence industry does not operate in a perfect market, and there is a need to balance the protectionist drivers—sovereignty and the need for national security—with the best-value drivers, such as the need for open competition, innovation, control of costs and avoidance of the unseemly delays that we note in many of these projects. As has been pointed out, we have one of the most openly competitive defence industries in the world. For several years, however, procurement rules have recognised the need to balance the protectionist and best-value approaches so as to take into account the importance of retaining domestic capability in the market. In my constituency in particular, we want to retain skills as well to deliver value for money.
	I was pleased that the 2005 defence industrial strategy identified yet again the need to retain strategic capability. I welcome the list of key strategic capabilities that we need to keep domestically. One of my local employers, Thales Missile Electronics in Basingstoke, has been identified as having an important strategic capability and an important role, particularly in fusing, in the complex weapons sector.
	Let us consider what has been asked of companies that have been identified as needing to provide important strategic capability. The defence industrial strategy is somewhat contradictory. It talks of best value and the need to maintain national security, but also talks explicitly of the need to retain the ability to source from abroad, as well as the ability to design, assemble and support domestically. My right hon. Friend the Member for Fylde (Mr. Jack) said that it was almost as if the report was trying to have its cake and eat it, or the Government were.
	The strategy readily acknowledges that open international competition could put the sustaining of key industrial capabilities at risk. The Minister said that it clarified priorities. That may be his objective, but he has some way to go. He must make absolutely clear what we are asking of our local defence manufacturers. There is rather more than a contradiction here. We need to know what message we are sending to our domestic defence industry. I believe that the Government are reviewing the way in which the strategy is to be implemented; perhaps they could think about that message during the process.
	We must ask ourselves whether we are retaining our key strategic capability if manufacturers are forced by cost pressures to outsource large parts of their production to lower-cost countries in order to compete in terms of price. Eventually, local production, and indeed capacity and skills, will become increasingly diluted, and our ability to be flexible and respond to the needs of the military—especially at times of pressure—will become more problematic. There must be more formal recognition of the trade-off between price and strategic capability.
	As I said at the outset, we are discussing the future defence of our country. We are discussing a vast area of Government expenditure. However, we are also discussing the future of an important sector of industry and manufacturing. After four iterations of defence strategy in the Government's lifetime, we must work hard to ensure that we get it right this time.

Tobias Ellwood: It is a pleasure to follow my hon. Friend the Member for Basingstoke (Mrs. Miller), who spoke with such passion about the industries in her constituency. Thales is and, I hope, will continue to be an important component of our defence industry.
	The Chairman of the Select Committee, my right hon. Friend the Member for North-East Hampshire (Mr.Arbuthnot), drew a distinction between our procurement needs for defence and the country's needs. They are separate but also together: separate in that we can have a defence industry that can have exports, but together in that our defence—Army, Navy and Air Force—will be one of the biggest markets for our products and equipment. We have not talked much about the former, but I want to say something about the latter.
	I understand that there is an annual debate on procurement. I hoped that this debate would include an audit, or analysis, of our requirements. We have heard a good deal of talk about where pieces of equipment are in the procurement process, but what are our needs? Why do we require that equipment to meet the challenges of the future? The Minister mentioned our needs in Afghanistan and the threat posed by the growth of terrorism, but I should have liked him to spell out exactly what our mission is and how it relates to our NATO obligations. We are part of NATO; we also work closely with the United States and the Commonwealth. Why must we provide all the equipment and all the manpower all the time? As the costs are limited, we should be sharing the financial burden with our allies, in Afghanistan, in Iraq or anywhere else. In future procurement debates, it would be useful to hear how we fit into this bigger picture, given that we are constricted by the total amount that we can spend.
	The Minister said that spending has in fact increased in overall terms, but the reality is that we have fewer soldiers, sailors and pilots, and fewer regiments, ships and squadrons. However, the obligations that we place on our military personnel have increased substantially. Our armed forces are therefore greatly overstretched, woefully undermanned and dangerously ill-equipped. As someone who served in the armed forces, it is quite upsetting to hear that £4.8 billion has somehow gone missing, according to the National Audit Office. That is a phenomenal sum, particularly given the basic equipment that we provide for our front-line soldiers.
	There was something of a spat earlier—swords at dawn, as it were—about the red lines and who is actually to blame. I am very new to the House and in fact, I do not care where the blame lies for past events; I want a solution for a future. So whether past Governments or today's Government are to blame, let us learn from experience and ensure that such mistakes are not made in future.
	A litany of examples of the various problems has been given. My hon. Friend the Member for Harwich (Mr. Carswell) spelled out the problems associated with the SA80. The Apache was purchased—can you believe it, Mr. Deputy Speaker?—without the training manual. Chinooks, which can fly only in good weather, were also purchased. Hercules that were purchased in 1999 have still not been cleared for use by paratroopers. These are schoolboy errors and they need to be corrected. There is also the example of the Clansman radio. When I was in the Army, we dreamt of the Bowman radio system, which was to be the panacea to all our communication problems. I was well aware that, when we were in Bosnia, we were using an insecure radio system. Giorgi, the local radio ham who worked in Sanksi Most, could hear us, but so could the enemy. We were using 30-year old kit. That should never happen in a sophisticated Army such as today's. There are other examples, such as the Astute class submarine, which was £1 billion over budget.
	I want to discuss the F-35, the joint strike fighter, but before doing so I want to deal with Galileo, which has yet to be mentioned today. No one has explained why we are purchasing a new global positioning system when we already have one that works and is free. Galileo, which consists of 30 satellites and mimics GPS, will cost £2.2 billion and has a running cost of £5 billion. It is backed by the EU but it is being pushed by France and Italy. Given that military equipment can run off GPS, and that we already have a free GPS system, it would be useful to hear from the Minister why we are purchasing a comparative system.
	The JSF is designed as a replacement for the Sea Harrier, but if matters proceed in the way suggested today, the new aircraft carriers due in 2012—HMS Queen Elizabeth and HMS Prince of Wales—are likely to be launched with no aircraft on them. I understand that this year—perhaps the Minister can clarify this point—we are to lose all our Sea Harriers, which means that there will be no radar platform to support and protect our carriers. The T45 has been launched, which has a radar facility that could be used to assist our carriers, but its range is limited to the horizon. The great advantage of the Sea Harrier and the F-35 is that they have a radar range of some 300 miles. For six years, our carriers will lack security at sea.
	Other problems have been referred to today, such as the budget cuts in America. Such cuts have come not only from Donald Rumsfeld, but from Capitol hill itself. There is also the question of technology transfer and the Americans' reluctance to hand over the technology necessary to repair and maintain the F-35.
	Another problem has to do with the date of implementation. I hope that we will have two wonderful aircraft carriers in 2012 but, even if everything goes to plan, it is likely that we will have no aircraft to put on them for another two years.
	Some hon. Members have said that, because we joined the Americans in the Iraq war, they should show their gratitude by giving us back this technology. I take issue with that. I made it clear that I opposed the Iraq war, and do not think that it should have anything to do with this matter. Our very strong relationship with the Americans is based on the fact that we share technology and intelligence: in the absence of the waiver, that is a factor that must be taken into consideration.
	The American House Committee on International Relations is at the core of the problem, not the Americans in general, and we should focus on the ITAR. It is important that Ministers and Tony Blair take every opportunity—

Mr. Deputy Speaker: Order. The hon. Gentleman should know that he must not refer by name to another   hon. Member. He should refer either to the relevant office—in this case, Prime Minister—or constituency.

Tobias Ellwood: I stand corrected, Mr. Deputy Speaker, and apologise to the House. The Prime Minister should take every opportunity to raise this matter, which is standing in the way of progress with the joint strike fighter aircraft.
	Circumstances changed after 9/11, and the Americans now have a different perception of how technology is to be shared. We need to lean on our strong relationship with them to make sure that we remain within their circle of trust so that we can share technology and allow the joint strike fighter project to go ahead.
	I was surprised to hear Labour Members say that we should walk away from the project and revert to plan B represented by the Typhoon. We have already spent £2 billion on the joint strike fighter project, and this debate has illustrated the huge amount of money that has been wasted on other projects. To walk away from the project now would be completely wrong. We need to make it work as soon as possible.
	The House is rightly keen to praise the armed forces, but we are not so keen to finance them. We are keen to send them into battle, but not so keen to equip them. We expect so much more from our armed forces but we give them less and less. That problem is evident in the number of battalions that are being cut, and in the quality of the equipment that we give them.
	Mistakes have been made by both Conservative and Labour Governments, but we must learn from them and move forward. I hope that the Minister will take heed of the message from today's debate, and make sure that the joint strike fighter aircraft goes ahead. We need to develop a stronger relationship with the US, so that that very important project can be completed.

Edward Vaizey: I am grateful, Mr. Deputy Speaker, for your indulgence in allowing me to speak, and I apologise for my absence during some of the debate. However, I assure the House that I kept abreast of developments on television, and that hon. Members look even better through that medium than they do in the flesh.
	I am also pleased to follow my hon. Friend the Member for Bournemouth, East (Mr. Ellwood), who made an eloquent speech. His points about America were reflected widely in the debate, but defence procurement is an incredibly important subject. The systems involved both protect our soldiers and put them at risk, so procurement mistakes can cost lives. By definition, those systems cost millions and millions of pounds, so the scope for waste is easy to imagine. Given that procurement involves politicians, officials and public money—and the fact that the armed forces change their requirements every year—it is almost essential to build in natural waste.
	Several hon. Members have welcomed the defence industrial strategy, and I am happy to do the same. The work done by Lord Drayson has been widely welcomed and is regarded as a good thing. I agree, and I hope that my praise does not undermine his career. However, despite the consensus with respect to the early stages of the strategy, I hope that the Government will take very seriously the report that will eventually emerge from the Defence Committee on how the strategy is working. That report should be studied carefully.
	I have read, as my hon. Friend the Member for Harwich (Mr. Carswell) has, Lewis Page's book, "Lions, Donkeys and Dinosaurs". It is a quick, enjoyable and highly polemical read. I imagine that it has caused no end of irritation in the corridors of power. I suspect that it makes many valuable points and I am also sure that it misses its target on many occasions. It led me to think about the principles that we should adopt in defence procurement.
	One principle that has emerged from the debate is that we are all anxious to keep some home-grown capability. It is not simply about jobs; it is also about the wider spin offs of technology transfer and negotiating muscle—of being able to bring something unique to the table. As a layman who is new to the defence debate, it is slightly tragic that we can no longer produce on our own an aircraft, like the Hawker Harrier, which has given us such useful service and was so innovative.
	It is worth hon. Members remembering that our special relationship with the United States is between the people and, often, a Prime Minister and a President, but is rarely between Parliament and Congress. As my hon. Friend the Member for Bournemouth, East pointed out, it is Congress that is causing the difficulties. We as a nation should look further afield for other partners. I was lucky enough to go to India earlier in the year where I met the Indian Defence Minister and Chief of Defence Staff. They are hoping to be 95 per cent. self-sufficient in providing their defence capability. I ask the Minister in a genuine spirit of inquiry what we are doing to build relationships with emerging nations such as India. India will soon be the largest country in the world. By 2030 it will be the third richest nation in the world. Surely we should now work on our special relationship with India in terms of our defence capability. I would be fascinated to hear from the Minister what we are doing on that basis. [Interruption.] Absolutely, we are selling Hawks to India, but what are we doing about developing home-grown defence technology with that country?
	The other point about defence procurement is that it does not stop when we hand over the cheque and get the kit sent over. Errors can continue long after the kit has been purchased. I am aware, for example, that the Apache helicopter, which we have purchased, is hugely short of spares. The maintenance lines that were meant to be set up at Watersham are still not set up. We have a shortage of flying instructors and have had to reduce the number of pilots on each course from 24 to 18. Parts are being cannibalised. When the Apache Squadron goes to Afghanistan, the training fleet here will have to be effectively mothballed. It was amusing to be told by my source, who of course will remain nameless, that when the Minister saw a display of two Apache helicopters last week, there were four in reserve just in case one of them broke down.
	Finally, please do not forget the Army. It is the poor relation in this debate. The Air Force is getting its new fighters. The Navy is getting its new ships. The Army is still waiting for the future rapid effect system. It is incredibly important that our troops have rifles, boots and clothing made here, not in China, and a new generation of armoured vehicles.

Mark Harper: Several hon. Members have rightly paid tribute to our two soldiers killed in the line of duty this week. I add my personal tribute and condolences to their families.

Adam Ingram: In my opening statement, I said that 100 British personnel in Iraq had now lost their lives, 77 as a direct result of hostile action. To be more accurate, the position is that 77 have been killed in action, including as a direct result of hostile action. I am grateful to the hon. Gentleman for giving way and letting me set the record straight on that.

Mark Harper: I am grateful to the Minister for putting that on the record.
	Before I start properly, I must comment on something else that the Minister of State did today. The occupant of the Chair had cause to guide him earlier in his remarks about keeping to the terms of the debate. Yet, as the Minister ranged widely across a number of defence matters, he did not find time to refer to his written statement issued today, which announces a significant number of job losses relating to the Defence Aviation Repair Agency. It is typical of this Government that they made that announcement under cover of a written statement at the same time as this debate on that very subject. The Minister announced the beginning of the review in an oral statement. Why did he not use an oral statement to announce his final decision, especially given the large number of jobs at stake? Could he not face the comments from Labour Back Benchers, or did he not want to remind them of the £104 million wasted on the Red Dragon facility? Perhaps the Under-Secretary will comment on that when he winds up.
	Defence is the first duty of Government and it is critical to fund our commitments properly. The strategic defence review in 1998 stated that
	"all three services have been over stretched because of the demanding pattern of our operations".
	The then Secretary of State, Lord Robertson, said that he was determined to put that right. However, since then, spending has declined from 2.7 per cent. of GDP to 2.3 per cent., and that is at a time when our commitments and operations have increased, and the challenges that we face are more unpredictable.
	It has been said:
	"Too often in the past our new equipment has been too expensive and delivered too late."
	Those are not my words, but the Government's in the SDR. If the Government recognised the problem correctly, they failed to fix it. In his opening remarks, my hon. Friend the Member for Aldershot (Mr. Howarth) laid out the record of overruns, highlighted by the National Audit Office, and the failure to deliver, with major procurement projects falling behind and delays increasing by 45 months over the past year. At that rate, we will never get the equipment.
	Because of the failure properly to fund our commitments, the cost overruns and delays have forced the Ministry of Defence to seek savings. But rather than improving efficiency, the NAO has concluded that the Government have cut future capabilities and the number of platforms instead, leaving us less able to deal with the security challenges of the future.
	On the subject of submarines, the Minister spoke of keeping a skills base in the long term and retaining the industrial capability of our submarine industry. Will he comment on the future of that capability after the construction of the Astute class has been completed in 2010? How will we maintain our skills base and what capability will be retained if there is a significant production gap between the completion of the Astute class and the potential replacement of Trident?
	The nuclear deterrent has not been mentioned much, apart from in the excellent contribution by the hon. Member for Bolton, North-East (Mr. Crausby). Our position on the nuclear deterrent is unequivocal: we are committed not only to retaining the current nuclear deterrent, but replacing it when necessary. We welcome the Defence Committee's inquiry into the strategic context and timetable for decision making for the replacement of Trident. I am sure that the Minister will also welcome the start of the debate on that issue.
	The increasing use of the private finance initiative to fund procurement projects raises the concern that we may be tying ourselves into very long-term contracts that may reduce our flexibility to react to developments in this fast changing world. That is a matter that we will no doubt revisit in the future.
	As my hon. Friend said, Government spending on defence research is critical to producing the battle-winning capabilities that we have seen to great effect in recent operations. However, research and development is being marginalised—spending on research and development fell between 2002–03 and 2003–04. The foundation of a solid defence industry remains research and development. Therefore, it is particularly worrying to read in "Defence Industrial Strategy" that there is a danger that
	"we could become increasingly dependent on defence technology solutions generated by other countries".
	Unless sufficient attention is given to defence research in the near future, the long-term sustainability of our future capabilities is called into question.
	The Government have an opportunity to demonstrate their commitment to fund defence research properly when they sell their stake in Qinetiq. Will the Minister confirm how much will be retained by the Ministry of Defence for investment in our future defence, and how much will be taken by the Chancellor to plug the gap in his finances?
	The Minister referred to the joint combat aircraft. It really is no good for him to say that there is no plan B. That sends a signal of weakness to our US partners, who will have us over a barrel. I hope that he will urgently develop a plan B and, as my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot), the Chairman of the Defence Committee, urges, publish it to the House to strengthen our negotiating position with our US partners.
	The debate was wide-ranging, with many contributions, and I shall touch briefly on some of them. My right hon. Friend the Member for North-East Hampshire demonstrated the link between procurement and its impact on our service personnel deployed onoperations, which is valuable and sometimes overlooked in these debates. My hon. Friend the Member for North Dorset (Mr. Walter) reflected the scepticism of defence training organisation personnel about the proposed public-private partnerships.
	My right hon. Friend the Member for Fylde (Mr.   Jack) spoke about the importance of fast jet manufacture in the UK and was one of several Members who emphasised the significance of technology transfer from our US allies. My hon. Friend the Member for Harwich (Mr. Carswell), in forthright style, challenged conventional wisdom on defence procurement and I am sure that we shall hear more from him on the subject.
	My hon. Friend the Member for Basingstoke (Mrs. Miller) spoke about a number of important issues   for her constituency and about the balance between sovereignty and cost control. My hon. and gallant Friend the Member for Bournemouth, East (Mr. Ellwood) focused on the requirements for defence procurement, which had not been widely touched on during the debate. He also spoke about burden-sharing with our allies and the overstretch of our forces. My hon. Friend the Member for Wantage (Mr. Vaizey) rightly reminded us of how high the stakes are in terms of money and, more important, lives.
	There were excellent contributions from other Members. I endorse the remarks of the right hon. Member for Edinburgh, East (Dr. Strang) about the late Rachel Squire's commitment to all matters defence. The hon. Member for Bolton, North-East, vice-chairman of the Defence Committee, spoke of the value of our relationship with the United States. His robust support for the replacement of our nuclear deterrent is welcome, at least on the Conservative Benches.
	The hon. Member for Merthyr Tydfil and Rhymney (Mr. Havard) spoke about the importance of value for money and highlighted the significance of lift capability. The hon. Member for Vale of Glamorgan (John Smith) referred to the importance of open defence markets and the bracing effects of competition.
	I am sorry that I missed the barnstorming speech of the hon. Member for Chorley (Mr. Hoyle). He agreed with my hon. Friend the Member for Aldershot that we must not write off the future of manned combat aircraft, and rightly condemned the proposed loss of a national capability to manufacture explosives, which is very important in his constituency. The hon. Member for Colchester (Bob Russell) made a detailed critique of the loss of specialist military textile research facilities.
	The hon. Member for Plymouth, Sutton (Linda Gilroy) reviewed some of the work of the Defence Committee and spoke about the importance of the naval aspects of the DIS. The hon. Member for Telford (David Wright) noted the significance of the defence logistics facility in his constituency.
	The hon. Member for Na h-Eileanan an Iar (Mr. MacNeil)—the name of whose constituency is a speech for someone from England such as me—referred to the importance of Qinetiq and other sites in Scotland. The hon. Member for Portsmouth, North (Sarah McCarthy-Fry) spoke of the experience she brought to bear on how to achieve value for money. She referred to risk-sharing and drew attention not just to the large players in defence, but also to small and medium-sized enterprises.
	As we prepare to send a large number of our brave and dedicated forces to Afghanistan, it is essential to ensure that we give them the proper tools to do the job. The key test for the DIS will be whether the Chancellor funds it properly. His past performance is not encouraging. The nation will be watching and will judge him harshly if he lets us down.

Don Touhig: I welcome the hon. Member for Forest of Dean (Mr. Harper) and congratulate him on his first Front-Bench performance. He mentioned at the start of his remarks that my right hon. Friend the Minister of State made a statement today. Yes, he made a written statement on the conclusion of the consultations on the Defence Aviation Repair Agency. As all hon. Members will know, he came to the House, faced hon. Members and answered questions when he announced the changes a while ago.
	This has been a valuable debate. The House has dealt with the complex issues of defence procurement in a very different context from previous years. My right hon. Friend the Minister of State opened the debate by describing how the nation no longer faces the dangerous but relatively predictable threat that we faced in the cold war. The new threats facing our armed forces are no less dangerous. We are justifiably proud of our armed forces and the work that they do throughout the world. We ask them to take on major new challenges, including fighting international terrorism, and in doing so many of them, as we have seen in the past few days, pay the ultimate price for the service that they give to our forces and our country. I am sure that every hon. Member joins me in paying tribute to them.
	The defence industrial strategy outlines a range of measures to safeguard the critical capabilities of the armed forces, now and in the future, thus ensuring that we deliver lasting improvements to the defence procurement programme in conjunction with industry. I have mentioned the context in which we are doing so, and I shall look at the record that we inherited in 1997, to which my right hon. Friend referred in opening the debate.
	In 1997, the year when the Conservative party was last in government—it will be a long time before the Conservatives are in government again—the NAO found that their top 25 defence procurement projects were likely to cost over £3 billion more than originally forecast. We take no lessons from the Opposition on the problems of defence procurement. That is the shocking legacy of incompetence that they left us. This week, we launched the most powerful destroyer in the history of the United Kingdom—the most powerful destroyer that we have ever built. All they launched when they were in government was a raft of cuts.
	The defence industrial strategy will deliver reform across the entire defence procurement system, building on smart acquisition principles. We want to ensure that we can respond to the rapidly changing strategic and operational environment by exploiting the opportunities offered by technology and innovation.

Michael Jack: Will the Minister give way?

Don Touhig: I will not give way. I hope that the right hon. Gentleman will forgive me. I would normally do so, but I have very little time to respond.
	A number of important contributions have been made, and I will try to respond to as many as I can. The hon. Member for Aldershot (Mr. Howarth), who led for the Opposition, was rather tetchy—which is unusual for him—when he got to his feet at the opening of the debate. We need no lecture on procurement, when our record is compared with that of the Conservative Government. I thought he was a little thin-skinned today. Perhaps we could adjust the defence industrial strategy procurement policy to buy him a thicker skin; he might then be happier to come here in future.
	The hon. Gentleman went on to say that the Conservative party wanted to spend more on defence research. I am very glad about that. He stood at the last election with a manifesto commitment to cut £2.6 billion from the defence budget. What would that have done for defence research?

Gerald Howarth: Will the Minister give way?

Don Touhig: Will the hon. Gentleman please forgive me? I am trying to respond to all the hon. Members who have contributed to the debate.

Gerald Howarth: All I would say is that we gave a specific undertaking that we would have spent at least an extra £50 million on defence research.

Don Touhig: As the Good Book says, by their deeds "ye shall know them." We know the Conservatives' record when in government.
	The hon. Gentleman referred to Qinetiq and said that there may be a problem in not getting a good deal for the taxpayer. Taxpayers are benefiting from our decision to dispose of part of Qinetiq. We will get the same stake as Carlyle. The MOD owns almost twice as much as it does, so our income will be twice as large as a result.
	My right hon. Friend the Member for Edinburgh, East (Dr. Strang) spoke for the whole House when he paid tribute to Rachel Squire. She was well thought of and well respected. There was a great deal of affection for her on both sides of the House, and we certainly mourn her passing.
	My right hon. Friend spoke about the Eurofighter. He was particularly concerned about Typhoon tranche 3. The UK has entered into international arrangements to order 232 Typhoons in three tranches. That undertaking remains unchanged. A decision on the third tranche is not required before June 2007, and will be the subject of the MOD's main gate approval process.
	My right hon. Friend also spoke about the problems of information and technology transfer. We are working with the US Government to improve the flow of technology transfer in equipment and research programmes. The Administration certainly support that approach, although someone has recently commented that the same is perhaps not true of Congress.
	The hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore), who spoke on behalf of the Liberal Democrats, welcomed the defence industrial strategy and recognised its importance and the contribution it will make. He said that some issues remained unresolved, although I am sure that we will return to them. He mentioned transparency issues, especially those relating to Typhoon. The estimated cost of the Eurofighter Typhoon programme has been classified as commercially sensitive to protect our ability to negotiate on subsequent purchases of the aircraft.
	My hon. Friend the Member for Bolton, North-East (Mr. Crausby) welcomed the launch of HMS Darling, which he described as an exciting beginning—

Julian Lewis: Daring!

Don Touhig: I thank the hon. Gentleman very much. I said "Darling," but will go for Daring. My hon. Friend the Member for Bolton, North-East thought that the launch of HMS Daring represented a great start for the defence industrial strategy. He spoke about a wide range of defence procurement matters, which showed what a valuable contribution he makes to the Defence Committee. The Chairman of the Committee, the right  hon. Member for North-East Hampshire (Mr. Arbuthnot), endorsed that view when he said that my hon. Friend made a cracker of a speech.
	The Chairman of the Committee made the important point that defence is important to our economy and our country—I absolutely agree, and defence procurement is the core of that. I welcomed his comments about my noble Friend Lord Drayson, the Minister with responsibility for defence procurement. I know that the Committee is doing further work on the defence industrial strategy and I am sure that its report will help to inform the Government about any future changes that we need to introduce.
	My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Havard) does not sit on fence, does he? He left no one in any doubt about his views, and I am sure that they will be taken into account by others who read comments made in the House. The right hon. Member for Fylde (Mr. Jack) raised several detailed questions that deserve a detailed reply, so he will get a letter from me in the post.
	My hon. Friends the Members for Vale of Glamorgan (John Smith), for Portsmouth, North (Sarah McCarthy-Fry) and for Plymouth, Sutton (Linda Gilroy) mentioned small and medium-sized enterprises. When my noble Friend Lord Drayson launched the defence industrial strategy, he stressed that it was for everyone in industry. He also pointed out at the time that just over half the Ministry of Defence contracts in 2004–05 were let to SMEs at a cost of £7.5 billion.
	The hon. Member for North Dorset (Mr. Walter) wanted to tempt me down the route of the defence training review. Two bids are being assessed and my decision will be based on the delivery of optimum training and the most effective technical and military solution for our forces. It will not be based on any regional considerations whatsoever, and the military ethos will be maintained at the heart of our defence training review.
	My hon. Friend the Member for Chorley (Mr. Hoyle) made several powerful points. I do not doubt that those in the United States who monitor proceedings in the House will have heard his views across the Atlantic. I also have no doubt that his views are shared by a great many hon. Members, so it was right that they were expressed.
	The hon. Member for Colchester (Bob Russell) made several important points about clothing research, so I will consider them and write to him. The hon. Member for Harwich (Mr. Carswell) did a good job of book promotion—perhaps he will show us the book at the end of the debate. He recognised that there have been procurement problems when both parties have been in government, so the problem is not exclusive to this Government.
	My hon. Friend the Member for Telford (David Wright) made an excellent case on behalf of the civil servants employed at Sapphire House. No decision will be taken until the spring. My right hon. Friend the Minister of State listened to his points and is quite happy to meet him and the trade unions as a result.
	The hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) spoke on behalf of the two nationalist parties. I welcome the fact that their Members have recognised the importance of UK defence to their local economies. I have no doubt that we will take on board several of his points as the debate continues in the future.
	The hon. Member for Basingstoke (Mrs. Miller) demonstrated an understanding of the problems of defence procurement that is shared by hon. Members on both sides of the House. I must tell the hon. Member for Bournemouth, East (Mr. Ellwood) that the Government are changing our armed forces to make them more usable and adaptable and ready to face the challenges in the world today. I hope he accepts that that aspiration is shared by Members on both sides of the House.
	My right hon. Friend the Minister of State made it clear that we are engaged in a significant modernisation programme that is delivering world-class procurement for Britain's world-class armed forces. In stark contrast to the shameful legacy of the previous Government, we are delivering. Our innovative programme, which is based on the emerging defence industrial strategy, will continue that delivery. As the challenges with which our brave servicemen and women deal grow and multiply in the 21st century, we will ensure that they have the technology, equipment and support that they need to counter the threats that they face. The Government give that commitment to our armed forces and the country.

Alan Campbell: I beg to ask leave to withdraw the motion.
	Motion, by leave, withdrawn.

PETITION
	 — 
	High Road, Benfleet

Bob Spink: This petition rails against the overdevelopment of our community, particularly the proliferation of blocks of flats, which is putting immense additional pressure on the area's overburdened infrastructure. I urge councillors to reject such applications, which threaten our community and quality of life. There are a number of petitions on the issue, but this one is signed by about 1,000 excellent people who care about our community. It is supported by good people such as Mr. Brian Keeler, who has made a name for himself fighting for the public interest locally. I congratulate and pay tribute to him, the people who work with him and everyone who has signed the petition, which states:
	To the House of Commons
	The Petition of people living around the St. Mary's Church Conservation Area,
	Declares that we the residents of Benfleet and surrounding areas object to the proposed demolition of the parade of shops in High Road, Benfleet to make way for a new block of shops including 13 two-storey flats above the shops with 13 parking spaces for those residents, on the grounds that there are insufficient parking spaces available for customers wishing to use the shops resulting in potential loss of trade to shopkeepers and this loss is unacceptable and for many other valid planning reasons as set out by the Member of Parliament in his objection letter.
	The Petitioners therefore call on the House of Commons to urge the Government to impress upon Castle Point Borough Council the need to reject the application on behalf of all residents of Castle Point.
	And the Petitioners remain, etc.
	To lie upon the Table.

LEGAL SERVICES COMMISSION (WALES)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Alan Campbell.]

Julie Morgan: I am pleased to have secured this debate so that I can raise an important issue. The recent announcement that the Legal Services Commission is ending funding for its specialist support service in England and Wales is disappointing and of great significance to the most vulnerable people in society. I have a great deal of first-hand information about the subject, as one of my caseworkers works for that service when he is not working for me, and my daughter is a housing advice worker for Shelter Cymru. Before I became an MP, I was employed by Barnardo's, the children's charity, and I worked with children and families on the front line, so I know that vulnerable families often need expert help to deal with their complex problems. Since I raised the issue a week ago in business questions, I have been contacted by a flood of organisations and individual workers, who have expressed grave concern about the ending of the service.
	In the past couple of weeks, when I have discussed the issue more generally with people who do not work in the field, I have discovered that they are not aware of the work of the specialist support service. It operates in the background, advising people who offer front-line support and advice, and it produces significant results in partnership with those advisers. It is funded by the Legal Services Commission, which funds 19 specialist organisations in England and Wales to provide expert services to eligible organisations. Three types of service are provided—one-off advice; ongoing support for case work, including difficult cases dealt with by front-line workers; and training. The Welsh specialist support service has been in existence since 2002. It began as a pilot, and was incorporated into the mainstream in February 2005. The pilot was the result of vigorous lobbying from the then director of the Legal Services Commission in Wales. The service operates telephone helplines on housing, welfare benefits and debt for holders of LSC contracts and for holders of the specialist and general help quality marks. It provides support with case work to such people by holding workshops on problematic aspects of law and procedure and by discussing tactics with them. In Wales, the pilot emphasised joint working and collaboration, which led to the setting up of housing forums in south-east, south-west and north Wales that promote knowledge of housing law as well as the sharing of knowledge and skills.

Betty Williams: Is my hon. Friend aware that there is great disquiet among the population in north Wales, particularly among those who work on behalf of vulnerable people? Many citizens advice bureaux members and agencies have contacted me in the past two days, asking me to convey to my hon. Friend their strong feelings about what is going on.

Julie Morgan: I thank my hon. Friend for that information, which echoes the intense lobbying that I have had over the past week or so, and reflects the intense disquiet in Wales and England.
	The Welsh service provides a formal training programme that is tailored to the needs of advisers identified over the helpline and through other feedback. The pilot project in Wales was thoroughly evaluated, including peer review of advisers' work, as late as 2004. Following that evaluation, the Legal Services Commission decided to incorporate the programme into its mainstream services. In Wales new three-year contracts were let from February 2005, which is only a year ago. The contractors in Wales are Morgans, Solicitors and Shelter Cymru, which deliver the service under a partnership arrangement. In England the three-year contracts were signed in March 2004, and in the light of the new information will be ended eight months early.
	Across England and Wales the Legal Services Commission also provides specialist support services in immigration, community care, mental health, HIV/AIDS, employment and human rights, which are delivered by a mixture of voluntary organisations and firms of solicitors in private practice.

Nia Griffith: Does my hon. Friend agree that not-for-profit organisations such as CATCH UP in Llanelli, with the help of the Wales specialist support service, have been able to deal with complex cases and stand up and fight for socially excluded people, while at the same time enlarging their own knowledge and skills, and that the termination of the service will mean the end of vital specialist support that enables their advisers to help some of the most vulnerable people in society?

Julie Morgan: I agree with my hon. Friend. Workers at the front line need the support and expert back-up of the support service, because there is no way that front-line workers can have all the knowledge and expertise that they need. They also need the support of working in partnership. The issues that are dealt with are sometimes extremely complex.
	The England and Wales services are provided by such acknowledged expert agencies as the Child Poverty Action Group, the Disability Law Service, Citizens Advice, Liberty, Mind, Shelter and the Terrence Higgins Trust, among others. The Access to Justice Alliance strongly opposes the cuts to specialist support because it will prevent people getting free expert advice when they go to their local advice centre or solicitors' firm with a complex or unusual problem. Front-line workers cannot be expected to have such expertise.

Keith Vaz: I congratulate my hon. Friend on winning the debate. Does not the astonishing decision by the Legal Services Commission undermine the principle of the Community Legal Service, which means that specialist agencies can refer cases to one another? The money is well spent, because people get quality legal advice.

Julie Morgan: Absolutely. It has been acknowledged by the Legal Services Commission that the advice given is quality legal advice, as my hon. Friend says.
	Two weeks ago, the providers of the service were given six months' notice and told that the service would stop in July 2006, with no apparent plans to replace the essential service that they have been providing. This has caused consternation and disbelief, especially since the Legal Services Commission evaluation and peer review of the service was so favourable.
	The evaluation report states, for example, that specialist support is a distinct alternative method of delivery, it increases access to legal advice, it is used by more voluntary agencies than by private solicitors, it is friendly and helpful, users felt that the services were of high quality, clients' cases were progressed faster, unwinnable cases were stopped and, in addition, the benefits of the Community Legal Service meant that it should become a mainstream contracting option. The evaluation also concluded that there was need for a service specially targeted at Wales, owing to the need for specific Welsh legal knowledge. The evaluation was done as recently as 2003. This complete change in direction is hard to understand.
	Following the evaluation, the Legal Services Commission decided to incorporate specialist support into its mainstream services and new contracts were let in 2005. However, the contracts contained a clause that enabled the Legal Services Commission to give six months' notice of termination, and it has now announced that it will be terminating the service.
	It appears that there was no consultation with the Welsh Assembly Government on the Welsh service, and the Minister responsible, Edwina Hart, has written to me expressing her disappointment about that lack of consultation, despite mechanisms being in place, and I believe that she has written to the Minister as well asking for the Minister to look again at this decision. It is obviously important that the Westminster and Welsh Governments work closely together on an issue such as this which straddles the responsibilities of both Governments.
	The rationale that the Legal Services Commission has given for the termination comes in its top-slice budget review. It says:
	"There is no doubt that the Specialist Support Service contractors are excellent specialist advisers in their field",
	but says that it cannot afford to pay for second-tier specialist advice to first-tier advisers when they are supposedly contracting with specialists to provide front-line services. The Legal Services Commission seems concerned that it is paying twice for the same service, but it is not. The specialist support service does not duplicate the work of front-line advisers.
	The Legal Services Commission ignores the fact that many front-line advisers are not solicitors and belong to organisations that do not have legal departments, and that the support service provides invaluable support to first-tier workers who do not necessarily have the legal expertise to deal with certain cases. The specialist support service ensures that good quality advice is given to those who need it most. It has been successful, and it has been acknowledged to have been successful.
	The Legal Services Commission also seems to be ignoring the fact that the main role of the specialist support service is to raise standards among first-tier advisers—to enlarge their knowledge and skills, boost their confidence and encourage them to stand up and fight for those who are socially excluded, and one needs support and expert help to do that.
	In addition, the specialist support categories concern complex areas of law, and contact with a specialist means that a front-line provider, who may have difficulties finding time to research the law, can rely on the expertise of a specialist who has the knowledge to hand, and that can apply to local solicitors as well.
	There is also a scarcity of highly skilled advisers in specialist support subjects, particularly in housing, welfare benefits and debt, and particularly so in Wales. I had understood that the Legal Services Commission recognised this problem and the need to raise skill levels and promote recruitment into these disciplines. The specialist support service helps build the skills of non-solicitor advisers. Without mentoring and training, I fear that many firms and agencies will muddle on, but will give poor or incomplete advice, and that the rights of the poor and disadvantaged—through no fault of these firms or agencies because they will be losing this specialist help—will go by the wayside.
	The decision to end the service is likely to result in the loss of a wealth of experience and will put at risk these innovative ways of reaching out to advisers and the resulting encouragement to raise their skill levels.
	I have had a host of case studies sent to me since it was known that I was to have this debate, particularly in housing, where many evictions have been avoided by the actions and expert knowledge of specialist caseworkers; in welfare benefits, where some cases have been stopped from going to court and in some cases the amount of an individual's entitlement has been doubled; and in debt, where an enormous amount of work has been done. As one solicitor who uses the service said:
	"We wouldn't have known where to begin without you."
	The front-line tier services are very dependent on the specialist advice that they are having.
	I am particularly concerned about the loss of the Welsh service, which will hit Wales very hard, with its higher levels of deprivation and housing need, and the significant occurrence of housing, benefit and debt problems. Geographically, a lot of Wales commands EU objective 1 status. The statistics show that the Welsh service is much valued and much used. During the 12 months from 1 January 2005 to 31 December 2005, the level of service given by just one agency in Wales is shown by the fact that there were 1,997 acts of assistance; 131 organisations were assisted, assistance often being given to four or five different advisers within one organisation; 182 people attended formal training courses; 47 people attended informal workshops; and 45 people attended housing law forums.
	The legal aid practitioners group has said that the Legal Services Commission is being short-sighted, because the service has provided a lifeline to many people. Richard Miller, who is a director of the LAPG, has said:
	"It has been one of the major success stories of the first five years of the LSC."
	Roy Morgan, principal of the Cardiff firm Morgans, which delivers the service, and LAPG chairman, has said:
	"The damage that will be done to access and sustainability is immeasurable."
	On Tuesday, I received a letter from the Speakeasy advice centre in Cardiff, which has used the service. It paid tribute to the way in which the service has enabled it to deal with complex cases for their clients and enlarge their knowledge and skills.
	The Department for Constitutional Affairs document, "A fairer deal for legal aid", discusses delivering a fairer deal and helping vulnerable and disadvantaged people to solve their disputes faster. It states that one key barrier to providing effective advice earlier is the existence of areas in which people cannot get advice—advice deserts. Since 2000, many solicitors have voted with their feet and left legal aid work, which has created areas of the country where there is no solicitor or agency with a LSC contract in a subject relevant to the client. As a result, the LSC has become increasingly dependent on voluntary sector agencies to deliver legal services in social welfare categories, but one cannot expect those caseworkers to have the in-depth knowledge provided by the specialist service.
	The specialist support service was seen as a welcome reform. The initiative was designed to improve services for poor and vulnerable people, and a single body, the LSC, was charged with planning and directing a comprehensive pattern of legal services. It was a radical step in an environment that often seems to be all stick and no carrot for legal aid practitioners and voluntary organisation advisers, and it was a positive measure that helped agencies equip themselves to meet the higher advice standards urged upon them.
	I cannot overstate the strain on front-line practitioners who work with homeless people or in other difficult areas. I sincerely hope that there is a chance to save the specialist support service, which plays a vital role in providing top quality advice and training. I urge the Department for Constitutional Affairs to ask the LSC to reconsider the matter, because the service has proved its worth. Practitioners from all over Wales and England have told me how difficult it will be to manage without expert help, but we want people who have few resources to access the best help, which the service provides. I urge the Minister to reconsider the decision.

Bridget Prentice: I congratulate my hon. Friend on securing this important debate and speaking so passionately on behalf of the most vulnerable in our society. The Legal Services Commission is the public body charged with the planning and delivery of legal aid, and it has recently taken the difficult decision to stop funding specialist support services. Specialist support services provide additional assistance to organisations that already hold legal aid contracts and which therefore have to meet the commission's quality criteria.
	I assure hon. Members that the quality principle will continue and that there is no question of undermining it. There are well-established mechanisms for monitoring the quality of specialist advice and services provided to clients. The specialist support contracts are worth about £2.9 million. With that sum, the commission can help a significant number of people with their legal problems. Although those particular contracts have been withdrawn, I assure my hon. Friend that the money is being reinvested in civil legal aid. Instead of the money being used to pay people to advise lawyers, it will be spent on paying lawyers and advisers to give more advice directly to more consumers. That sum could translate into several thousand more acts of advice and assistance.
	I agree with my hon. Friend that there is no reason to doubt the quality of the advice that specialist support contract-holders have been providing. The Legal Services Commission is very keen that clients should continue to benefit from the expertise of those people who have been delivering specialist support service advice.

Betty Williams: Can my hon. Friend give us a categorical assurance that the proposals that she is spelling out will provide the same level of services as the service that my hon. Friend the Member for Cardiff, North (Julie Morgan) described? Honestly, I do not think that they will.

Bridget Prentice: I can give this assurance: the commission believes that by giving this money—almost £3 million—directly to front-line advisers, it will be able to advise thousands more people who are desperate for such legal advice. Initially, I shared some of the concerns about the withdrawal of funding, so I understand why it worries my hon. Friend and other Members who are here, particularly those from Wales. Of course, it will also be of concern to their constituents—the people whose rights the legal aid system was established to promote and uphold.
	I have considered the issue very carefully, and I know that the commission has not taken this decision lightly. However, I am persuaded that by refocusing the limited resources available, the Community Legal Service will be better able to defend the rights of the people about whom my hon. Friend is rightly concerned. That has to be good news for the people, whether in Wales or in England, whom this decision affects most.

Keith Vaz: I know that my hon. Friend has a difficult job, and she does it extremely well. Nevertheless, we are talking about £3 million out of a budget of £1.1 billion. Has she received any evidence to suggest that that money is not being properly spent?

Bridget Prentice: The commission launched a consultation strategy on making legal rights a reality and it discovered that the high level of need for first-tier, or direct, consumer advice was not being met and that far more must be made available. It is vital that we act to try to redress that gap. The commission believes that refocusing these resources on advice given directly to the consumer, rather than to the lawyers who then go on to advise the consumer, would provide a much better service to a far larger number of people.
	That is particularly essential in places such as Wales, which has large rural areas. The commission is working with the Welsh Assembly Government more closely than ever before. When it carried out its consultation on the future of legal services, it consulted the Welsh Assembly Government on their strategy for civil legal aid and the Community Legal Service. It is keen to receive views from the Welsh Assembly and to continue to work together to identify how we best use limited resources. Together, and in partnership with the Welsh Local Government Association, the commission is identifying the areas in which it will be most fruitful to pilot the delivery of client-focused and integrated face-to-face specialist advice services that will provide a one-stop system to help people to use the law in tackling their problems.
	The commission is increasing the services it provides by telephone. In Wales, Community Legal Service Direct provides free information, help and advice direct to the public on a range of common legal problems through its helpline, website and leaflets. All those services are available bilingually. During 2005, there were almost 8,000 calls to the telephone service from Wales, of whom 6,500 were from clients wanting to speak to an adviser, which resulted in 4,500 specialist cases being advised on. The commission is tendering to expand the capacity of CLS Direct to take calls and advise Welsh-speaking callers on welfare benefits, debt and housing.
	In taking forward the vision set out in "Making Legal Rights a Reality", the commission and its partners are building on the existing successes of the Community Legal Service in Wales, which is already helping more people. By the end of November last year, it had undertaken 8 per cent. more acts of specialist advice and assistance in this financial year compared with the same period in the previous year. It has reversed a previous decline.
	After close working with the Welsh Language Board in August last year, the Legal Services Commission launched a consultation paper on its proposed Welsh language scheme. The commission will continue to work with the Welsh Language Board on the implementation of the final scheme at the beginning of April.
	I should like to take the opportunity, which has arisen thanks to my hon. Friend the Member for Cardiff, North, to announce, on behalf of the Legal Services Commission, new funding for four additional outreach money advice workers in Wales via the Treasury's financial inclusion fund. That will help to deliver the cross-government over-indebtedness strategy. The projects will be of enormous benefit to those people in Wales who most need specialist money advice. I believe that all my hon. Friends agree that there is an increasing need for such advice in all our constituencies. The commission will shortly make further announcements about additional services in England.
	Other notable Community Legal Service work in Wales includes a housing possession court duty scheme, which provides an invaluable emergency advice and representation service to those in immediate danger of losing their homes. The commission has also funded 12 local projects through the partnership initiative budget, some of which have also benefited from a joint funding arrangement with the Welsh Assembly Government and the then Community Fund—now part of the Big Lottery Fund.
	Those include the Connect 2 U project, run by Torfaen county borough council, which provides information and advice on benefits, debt, consumer rights, housing, employment and immigration problems via video links from libraries and from the council's customer care centre to the citizens advice bureau, the trading standards department and other council departments. Another initiative, on which I am especially keen, is the young people's advice and information project run by Caerphilly council citizens advice bureau. It provides a welfare benefits and debt advice service targeted at young people.
	I hope that my hon. Friend will be assured that the Legal Services Commission is working closely with agencies in Wales to ensure that the desperately needed aspects of legal advice are indeed being resourced.

Julie Morgan: I thank my hon. Friend for explaining what is being done in Wales, and especially for the announcement of the four new workers. However, does not she agree that the front-line workers need specialist back-up to solve the complex cases? We need the projects that she has announced today—and many more—but for them to be effective, they need the service that is currently working well, is applauded by all practitioners and helps not only solicitors but the many places in Wales where there are no solicitors but front-line advice workers who do not have legal training.

Bridget Prentice: My hon. Friend makes her point well. I agree—and the Legal Services Commission agrees—that specialist advice is important. The commission has refocused the money to ensure that even more people get advice and it has also invited all the practitioners and specialist advice services that were previously funded—that will continue for the next six months—under the current system to discuss how they can advise clients and consumers directly rather than through a second-tier system.
	The commission does not in any way want to prevent specialist advice from being given. It wants to bring it up front, so to speak, so that it is available direct to the clients.

Nia Griffith: Does my hon. Friend agree that it can sometimes be a long process for someone to explain a situation to what we might call a lay adviser? That time is well used, because the lay adviser takes up only a small amount of the specialist adviser's time. This is particularly relevant given the geography of Wales. For example, it is difficult for many of my constituents to benefit from some of the services that the Minister has mentioned. I therefore ask her to reconsider this matter. We need to think carefully about how we use volunteer time, which we have all agreed we want to promote.

Bridget Prentice: I can assure my hon. Friend that I will continue to consider the situation and to monitor its progress. I agree that there are times when specialist advice is appropriate, and others when non-specialist advice is appropriate. I want to see more partnership working to create the opportunity for far more people to get advice.
	It has been six years since the Community Legal Service was established, and it now seems right to focus on how we provide specialist legal services. I can assure all my hon. Friends who have participated in this debate that I will continue to monitor the situation carefully, and I would be very pleased to hear feedback from them on how the proposals have impacted on their constituents. The most important thing that we can achieve through the Legal Services Commission and through the provision of specialist and general advice to consumers is to ensure that those consumers receive quality advice at the time when they need it.
	Question put and agreed to.
	Adjourned accordingly at twenty-nine minutes to Seven o' clock.